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Full text of "North Carolina Register v.7 no. 4 (5/15/1992)"

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The 
NORTH CAROLINA 

REGISTER 



IN THIS ISSUE 



; T^ORTH , 



CONa 

TlTUl uyji 

TIOmI 11 (J 



PROPOSED RULES 
Agriculture 

Certified Public Accountant Examiners 
Cosmetic Art Examiners 
Hiunan Resources 
Insurance 
Justice 



FINAL RULES 
Revenue 

LIST OF RULES CODIFIED 

RRC OBJECTIONS 



RECEIVED 

MAY ?'^ 1992 
LAW LIBRARY 



RULES INVALIDATED BY JUDICIAL DECISION 
CONTESTED CASE DECISIONS 

ISSUE DATE: May 15, 1992 
Volume 7 • Issue 4 • Pages 332-400 



INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMTNTSTRATTVF, ropp 



NORTH CAROLINA REGISTER 



The North Carolina Register is published twice a month and 
contains information relating to agency, executive, legislative and 
judicial actions required by or affecting Chapter 150B of the 
General Statutes. All proposed administrative rules and notices of 
public hearings filed under G.S. 150B-21.2 must be published in 
the Register. The Register will typically comprise approximately 
fifty pages per issue of legal text. 

State law requires that a copy of each issue be provided free of 
charge to each county in the state and to various state officials and 
institutions. 

The North Carolina Register is available by yearly subscription 
at a cost of one hundred and five dollars (S105.00) for 24 issues. 
Individual issues may be purchased for eight dollars (S8.00). 

Requests for subscription to the North Carolina Register should 
be directed to the Office of Administrative Hearings, 
P. 0. Drawer 27447, Raleigh, N. C. 2761 1-7447. 



ADOPTION AMENDMENT, AND REPEAL OF 
RULES 



The following is a generalized statement of the procedures to be 
followed for an agency to adopt, amend, or repeal a rule. For the 
specific statutory authority, please consult Article 2A of Chapter 
150B of the General Statutes. 

Any agency intending to adopt, amend, or repeal a rule must 
first publish notice of the proposed action in the North Carolina 
Register. The notice must include the time and place of the public 
hearing (or instructions on how a member of the public may request 
a hearing); a statement of procedure for public comments; the text 
of the proposed rule or the statement of subject matter; the reason 
for the proposed action; a reference to the stamtory authorit)' for the 
action and the proposed effective date. 

Unless a specific statute provides otherwise, at least 15 days 
must elapse following publication of the notice in the North 
Carolina Register before the agency may conduct the public 
hearing and at least 30 days must elapse before the agency can take 
action on the proposed rule. An agency may not adopt a rule tliat 
differs substantially from the proposed form published as part of 
the public notice, until the adopted version has been published in 
the North Carolina Register for an additional 30 day comment 
period. 

When final action is taken, the promulgating agency must file 
the rule with the Rules Review Commission (RRC). After approval 
by RRC, the adopted rule is filed with the Office of Administrative 
Hearmgs (OAH). 

A rule or amended rule generally becomes effective 5 business 
days after the rule is filed with the Office of Administrative 
Hearings for publication in the North Carolina Administrative Code 
(NCAC). 

Proposed action on rules may be withdrawn by the promulgating 
agency at any time before final action is taken by the agenc\' or 
before filing with OAH for publication in the NCAC. 



TEMPORARY RULES 

Under certain emergency conditions, agencies may is 
temporary rules. Within 24 hours of submission to OAH 
Codifier of Rules must review the agency's written statemen 
findings of need for the temporary rule pursuant to the provision 
G.S. 150B-21.1. If the Codifier determines that the findings 
the criteria in G.S. 150B-21.1, the rule is entered into the NCA( 
the Codifier determines that the fmdings do not meet the criti 
the rule is returned to the agency. The agency may supplemen 
findings and resubmit the temporary rule for an additional re\ 
or the agency may respond that it will remain with its in 
position. The Codifier, thereafter, will enter the rule into 
NCAC. A temporary rule becomes effective either when 
Codifier of Rules enters the rule in the Code or on the s 
business day after the agency resubmits the rule without ch; 
The temporary rule is in effect for the period specified in the ru 
180 days, whichever is less. An agency adopting a temporary 
must begin rule-making procedures on the permanent rule a 
same time the temporary rule is filed with the Codifier. 



NORTH CAROLINA ADMINISTRATIVE CO 



The North Carolina Administrative Code (NCAC) 
compilation and index of the administrative rules of 25 
agencies and 38 occupational licensing boards. The N( 
comprises approximately 15,000 letter size, single spaced pag f 
material of which approximately 35% of is changed anni 
Compilation and publication of the NCAC is mandated by 
150B-21.18. 

The Code is divided into Titles and Chapters. Each state aj 
is assigned a separate title which is further broken dow 
chapters. Title 21 is designated for occupational licensing boar 

The NCAC is available in two formats. 



(I) 



(2) 



Single pages may be obtained at a minimum co 
two dollars and 50 cents (S2.50) for 10 pages or 
plus fifteen cents (SO. 15) per each additional page 
The full publication consists of 53 volumes, totali 
excess of 15,000 pages. It is supplemented mo 
with replacement pages. A one year subscription t 
full publication including supplements ca 
purchased for seven hundred and fifty d' 
(S750.00). Individual volumes may also be pure 
with supplement service. Renewal subscriptioi 
supplements to the initial publication are available 
Requests for pages of rules or volumes of the NCAC shoi 
directed to the Office of Administrative Hearings. 



CITATION TO THE NORTH CAROLINA 
REGISTER 



The North Carolina Register is cited by volume, issue 
number and date. 1:1 NCR 101-201, April 1, 1986 ref 

Volume 1, Issue 1, pages 101 through 201 of the North Ca 
Register issued on April 1, 1986. 



FOR INFORMATION CONTACT: Office 
Administrative Hearings, ATTN: Rules Division, P 
Drawer 27447, Raleigh, North Carolina 27611-7447, (9 
733-2678. 



NORTH 
CAROLINA 
REGISTER 



ISSUE CONTENTS 




Office of Administrative Hearings 

P. O. Drawer 27447 

Raleigh, NC 27611-7447 

(919) 733 - 2678 



Julian Mann III, 

Director 
James R. Scarcella Sr., 

Deputy Director 
Molly Masich, 

Director A PA Services 



I. PROPOSED RULES 
Agriculture 

Gasoline and Oil Inspection 
Board 336 

Structural Pest Control 
Committee 332 

Veterinary Division 342 

Human Resources 

Aging, Division of 346 

Insurance 

Life and Health Division 347 

Justice 

General Statutes Commission.. 353 
Licensing Boards 

CPA Examiners 355 

Cosmetic Art Examiners 360 



II. FINAL RULES 
Revenue 

Motor Fuels Tax Division 361 

III. LIST OF RULES CODIFIED 362 

rV. RRC OBJECTIONS 365 

V. RULES rWALIDATED BY 

JUDICIAL DECISION 369 



Staff: 

Ruby Creech, 

Publications Coordinator 
Teresa Kilpatrick, 

Editorial Assistant 
Jean Shirley, 

Editorial Assistant 



VL CONTESTED CASE 
DECISIONS 

Index to ALJ Decisions 370 

Text of Selected Decisions 381 

VH. CUMULATHE INDEX 399 



NORTH CAROLCSA REGISTER 

Publication Schedule 

(May 1992 - December 1993) 



Issue 


Last Day 


I ^st Day 


Earliest 


Earliest 


Last Day 


+ 


Date 


for 


for 


Date for 


Date for 


to 


Earliest 




Filing 


Electronic 


Public 


Adoption 


Submit 


Effective 






Filing 


Hearing 


by 

Agency 


to 
RRC 


Date 


+++++++++♦+♦++♦++++♦♦♦+++++++++++++++ ++++++++++++ ♦++++++++♦++++++++ 


05/01/92 


04/10/92 


04 17/92 


05/16/92 


05/31 92 


06'20/92 


08/03/92 


05/15/92 


04/24/92 


05/01/92 


05/30/92 


06/14 92 


06/20/92 


08/03/92 


06 01/92 


05/11/92 


05 18/92 


06/16/92 


07 01 92 


07 '20/92 


09/01/92 


06/15/92 


05/25/92 


06 01/92 


06/30/92 


07/15,92 


07/20/92 


09/01/92 


07/01/92 


06/10/92 


06 17/92 


07/16/92 


07/31,92 


08/20/92 


10/01/92 


07/15/92 


06/24/92 


07 01 '92 


07/30/92 


08 14 92 


O8/2O/92 


10/01/92 


08/03/92 


07/13/92 


07 '20/92 


08/18/92 


09 02, 92 


09/20/92 


11/02/92 


08 14/92 


07/24/92 


07 31/92 


08/29/92 


09/13 92 


09 20 92 


11 02/92 


09/01/92 


08/11/92 


08 18/92 


09/16/92 


10/01,92 


10 '20/92 


12,01/92 


09:15/92 


08/25/92 


09 01/92 


09/30/92 


1015,92 


10/20/92 


12/01/92 


10/01/92 


09/10/92 


09; 17/92 


10/16/92 


10 3192 


1120/92 


01/04/93 


10/15/92 


09/24 92 


10 0192 


10/30/92 


11 14 92 


1120/92 


01/04/93 


11 02/92 


10/12'92 


10 19 92 


11/17,92 


12 02 92 


12 20 '92 


02/01/93 


11/16/92 


10/23/92 


10 30 92 


1201/92 


12 16 92 


12 20/92 


02/01/93 


12 01/92 


11,06/92 


11 13 92 


12 16/92 


12 31/92 


01/20/93 


03/01/93 


12/15/92 


11/24/92 


12/01/92 


12/30/92 


01/1493 


01-20/93 


03/01/93 


01,04/93 


12/09/92 


12 16/92 


01/19/93 


02 03 93 


02-20/93 


04/01/93 


01/15/93 


12/2292 


12 31 92 


01/30/93 


02 14 93 


02 20/93 


04 01/93 


02 01/93 


01,08 93 


or 15 '93 


02/16/93 


03 03, 93 


03-20/93 


05/03/93 


02 15/93 


01/25/93 


02 01 '93 


03 02/93 


0317/93 


03 20-93 


05 03 93 


03:01/93 


02/08/93 


02/15/93 


03,16/93 


03,31/93 


04 20/93 


06/01/93 


03/15/93 


02/22/93 


03 01 '93 


03/30/93 


04 14/93 


04 20/93 


06/01/93 


0401/93 


03' 11/93 


03,18 93 


04/16/93 


05 01 93 


05 20/93 


07/01/93 


04 15/93 


03/2493 


03/31-93 


04/30/93 


05 1 5/93 


05 -20 '93 


07/01/93 


05 03/93 


0412 93 


04 19 93 


05 18/93 


06 02 93 


06 20,93 


08 02/93 


05/14/93 


04/23/93 


04 3093 


05/29/93 


06 13 93 


0620/93 


08/02,93 


06/01/93 


05/10/93 


05 17/93 


06/16/93 


07 01/93 


07 '20/93 


09/01/93 


06/15/93 


05/2493 


06 01 93 


06/30/93 


07/15 93 


07/20'93 


09,01/93 


07/01/93 


06/ 10 '93 


06/17/93 


07/16/93 


07/31 93 


08-20/93 


10/01 /93 


07,15/93 


0623 93 


06 30 93 


07/30/93 


08 14 93 


OS 20 93 


10 01 93 


0802/93 


07/12/93 


07/19,93 


08/17/93 


09,01,93 


09 20/93 


11 01 93 


08 16/93 


07/26/93 


08/02/93 


08/31/93 


09/15,93 


09 20 93 


11 01/93 


09 01/93 


08/11/93 


08 18/93 


09/16/93 


1001/93 


10 '20 93 


12 01 93 


09 15/93 


08 '24 93 


08 31/93 


09/30/93 


10/15 93 


10 20 '93 


12 01/93 


10 01/93 


09 10 93 


09 17 '93 


10 16 93 


10 31 93 


11 20 93 


01 04 94 


10,15/93 


09 '24 93 


10 01 93 


10 30 93 


1 1 14 93 


11 2093 


01 04 94 


11 01/93 


10/11 93 


10 18'93 


11/16/93 


12 01 93 


12-20 93 


02 0194 


11/15/93 


10/22,93 


10 29 93 


11/30/93 


12 15 93 


12 20,93 


02,01/94 


12 01/93 


11/05 93 


111593 


12 16 93 


12 31 93 


or 20 -94 


03/01/94 


12 15/93 


11/24^93 


12 0193 


12 30/93 


01 14 94 


01 20 94 


03 01 94 



* The "Earliest Effective Date" is computed assuming that the agency follows 
the publication schedule above, that the Rules Review- Commission approves the 
rule at the next calendar month meeting after submission, and that RRC delivers 
the rule to the Codifier of Rules five (5) business days before the 1st business 
day of the next calendar month. 



PROPOSED RULES 



TITLE 2 - DEPARTMENT OF 
AGRICULTURE 

Jy otice is hereby given in accordance with G.S. 
J50B-2J.2 that the N.C. Structural Pest Control 
Committee intends to amend rule(s) cited as 2 
NCAC34 .03/3, .03/8, .0602, .0604, .0902, ./OOl; 
and adopt rule(s) cited as 2 NCAC 34 .0406 with 
changes from the proposed text noticed in the 
Register, Volume 6, Issue 2/, pages /574-/579. 

1 he proposed effective date of this action is Au- 
gust 3, /992. 

O omment Procedures: Interested persons may 
present their views in writing from June /5, /992 
to July /5, 1992. Such written comments must 
be mailed to the Chairman of the North Carolina 
Structural Pest Control Committee, P.O. Box 
27647, Raleigh, NC 276/1. 



CFiAPTER 34 



STRLCTLRAL PEST CONTROL 
DIVISION 



SECTION .0300 - LICENSING AND 
CERTIFICATION 

.0313 INFORMATION ON REGISTERED 
TECHNICIAN'S IDENTIFICATION 
CARDS 

(a) A registered technician's identification card 
shall contain, but not be limited to, the following 
information: 

(1) name of registrant; 

(2) name of licensee or employer; 

(3) name of licensee's company; 

(4) address of licensee's company; 

(5) license number and phase(s) of licensee; 

(6) age, weight, height, color of hair and eyes 
of registrant; 

(7) job classification of card holder; 

(8) issuance date, expiration date and license 
year covered by card. 

(b) The registered technician's identification 
card and the license of the employer of the card 
holder shall bear the same license number and 
license phase(s). Each registered technician's 
identification card shall bear only one Ucense 
number, one company name, and not more than 
three license phases. 

(c) A licensee or non-commercial certified 
applicator applying for the issuance or renewal 
of a registered technician's identification card for 
his employee shall certify to the Division that the 
employee has completed employee training ap- 
proved by the committoo Committee in struc- 
tural pest control work. 



(d) In the event the committoo Committee ap- 
proves employee training materials produced by 
the Division, such materials shall be purchased 
for each home office and by at least one non- 
commercial certified apphcator at each business 
location at a cost determined by the committoo; 
Committee; provided, however, » licensoe who 
is Ucensees performing work under the structural 
pest control license of another and non- 
commercial certified applicators who are not 
currently engaged in structural pest control shall 
not be required to purchase the training materi- 
als. 

(e) Training materials shall be made available 
for inspection during regular business hours upon 
request by the Division. 

Statutory Authority G.S. /06-65.29. 

.0318 CHANGE IN STATUS OF LICENSEE 
AND/OR CERTIFIED APPLICATOR 

(a) When there is a change in the status of a 
licensee in relation to the company or branch 
office, the license number given to the original 
licensee of a company may be retained by that 
company or branch office, at the discretion of the 
committoo, Committee, and upon written request 
within 10 days of such change. 

(b) It shall be the responsibility of each licensee 
and certified applicator to inform the committoo 
Committee secretary, in writing, on a form pre- 
scribed by the Division, and within 10 days, of 
any change in employment status, including but 
not limited to: 

(1) change from one employer to another; 

(2) change of business address; 

(3) change of company name; 

(4) change of telephone number; 

(5) sale of business; 

(6) discontinuance of business; 

(7) change of business location; 

(8) change of resident agent. 

Statutory Authority G.S. /06-65.29. 

SECTION .0400 - PLBLIC SAFETY 

.0406 SPILL CONTROL 

Licensees and certified applicators shall main- 
tain adequate spill control materials and/or 
equipment at all locations used to store pesticides 
and on all service vehicles used to transport pes- 
ticides. 

Statutory Authority G.S. /06-65.29. 

SECTION .0600 - WOOD-DESTROYING 
ORGANISMS AGREEMENTS 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



332 



PROPOSED RULES 



destroying organism evidence discovered in, on , 
under or in or on debris under a structure in- 
spected pursuant to this Rule except as required 
by Paragraph (b) of this Rule. 

Statutory Authority G.S. 106-65.29. 

.0604 WOOD-DESTROYING ORGANISMS 
RECORDS 

(a) A duplicate of each written agreement and 
waiver (if applicable), including wood dootroying 



.0602 WOOD-DESTROYING INSECT AND 
OTHER ORGANISM REPORTS 

(a) Bolwoon Soptombor \-; 1JJ87 aft4 January' 34-7 
IJiSS, afty Any written statement as to the pres- 
ence or absence of wood-destroying insects or 
their damage in buildings or structures for sale 
shall be on oithor HLD Form ^ier 03053 ©f the 
WDIR 100. A* ef February 4t Wi*T &ftly 
W'DIR 4-00 shall b» accept gd fof w^e by ttn? 
Committc'o. IncomplL ' to An incomplete or inac- 
curate Wood- Destroying Insect Reports Infor- 
mation Report shall not be acceptable and the 
issuance of such roporto a report is grounds for 
disciplinary action by the committoo. Commit- 
tee. No Wood- Destroying Insect Roporto Infor- 
mation Report or Wood- Destroying Organism 
Rc'portfj Report shall be issued before an in- 
spection of the building or structure is made. 
Each Wood- Destroying Insect Information Re- 
port issued by a licensee shall be kept in the files 
of said licensee and made available at- i^ for in- 
spection upon request of the onforcomont agency, 
fof inspection. Division. 

(b) If during the inspection of a structure, a 
licensee or his authorized agent finds live subter- 
ranean termites or visible evidence of past or 
present infestation of subterranean termites (such 
as tubes, damage, cast wings, infested wood 
scraps or other cellulose materials, etc.) in the 
structure and there is no visible evidence that said 
structure has been treated for subterranean 
termites, the licensee shall treat said structure for 
subterranean termites prior to the issuance of a 
Wood- Destroying Insect Report on the structure 
which states that the structure is free from sub- 
terranean termites. 

(c) A licensee, certified applicator or registered 
technician shall not remove or destrov. or cause 
the removal or destruction of. any wood- Statutory Authority G.S. 106-65.29. 

SECTION .0900 - DUTIES AND RESPONSIBILITIES OF LICENSEE ( 

.0902 FINANCIAL RESPONSIBILITY 

(a) Structural p#^ control liconsoeo A licensee shall obtain and maintain financial responsibihty by in 
the form of a general liability insurance with policy which covers operations in progress and completed 
operations, included a«4 minimum limits equal te- &f greater than A» minimum limits outlin e d ift Rul e 
.0002(b) ef Ai* Section. Afty lic e ns e e subcontracting work shall afeo obtain owner "o aft4 contractor's 
protective mouranoo. I he insurance policy must provide co\'erage for all emplosees that yvork for the 
licensee. If an insurance policy is issued t£ a structural pest control company that employs more than 



insoct reports Bf wood destroying organism Fe- 
ports, for the control and or prevention of any 
wood-destroying organism shall be kept by the 
hcensee for a minimum of two years beyond the 
expiration date of the written agreement. The 
duphcate of each yvritten agreement shall contain, 
in addition to the information specified under 
Rule .0605(a) or Rule .0605(d) of this Section, 
the foUowing: 

(1) EPA approved brand name of pesticide 
used; and 

(2) Information required by EPA 
(b) A duplicate of each wood-destroying insect 



or wood-destroying organism report shall be kept 



by the licensee for a mini mum of two 
vond the date of issuance. 



(c) fb| Non-commercial certified applicators 
shall maintain the following records for tyvo years 
beyond the last date of treatment: 

(1) EPA approved brand name of all pesti 
cides used; 
Target pest; 
Site of apphcation; 
Date of apphcation; and 
Information required by EPA. 



(2) 
(3) 
(4) 
(5) 



one licensee and the policy otherAvise meets the standard set forth in this Rule, all licensees employed 
by the structural pest control company will be deemed to have insurance. 

(b) Muiimum limits: "Fhc insurance policy required in Paragraph (a) of tliis Rule must provide the 
foUowinsz minimum co\'eratze: 



( 1 ) Single limit: 



Property Damage 
Bodily Injury' 

(2) Combined single limit 

(c) Each applicant for a hcense in any phase of structural pest control shall shoyv evidence of his fi- 
nancial ability to properly indemnify persons suffering from the use or apphcation of pesticides in the 



$100,000 Each Occurrence 
$300,000 Each Occurrence 
$300,000 Each Occurrence 



335 



\-4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



form of a Certificate of Insurance completed by the insurance company with the Division named as a 
certificate holder. 

(d) The Certificate of Insurance shall clearly set forth the type of coverage, limits of liability, and any 
exclusions of the policy and shall have attached a copy ef e ither endoroomont Gfe 04 W ©f GG 04- ^ 

Carolina Dopartmont ©f Inouranco which pro video fof pollution aftd contamination od'orago. an 
endorsement which indicates that the policy provides coverage for any pollution and/or contamination 
occurring as a result of the use or application of any pesticide. 

(e) The license apphcant shall be responsible for the submission of the Certificate of Insurance to the 
Division as specified in P^ul e .0903 Paragraphs (c) and (d) of this Sootion. Rule. No hcense shall be 
issued, re-issued, or renewed unless or until said Certificate of Insurance is received by the Division. 

(f) The insurance policy(s) shall be with companies licensed, or otherwise approved to do business 
in North Carolina, by the NC Department of Insurance. The insurance policy shall be in full force and 
effect during the entire period covered by the license certificate. The hcense shall expire at- oxpiration 
ef upon: roduotion »f tfe© polioioo bolow minimum roquiromonto b* oancoOation thoroof. 

(1) reduction of the available coverage under the policy below the minimum Limits set forth in 
Paragraph (b) of this Rule; 

(2) cancellation of the policy; or 

(3) expiration of the policy. 

Such expired license shall only be reinstated upon satisfactory proof from the licensee that he has ob- 
tained the required fmancial responsibility coverage. 

(g) The licensee shall give at least 10 days notice by rogiotorod mad, te tb« Division a« a condition 

WJ^CJCTSVTTT ^^T CIIU I_T1JI I \.nj ll\J.H\Jl I U T 11 l\J l_l UUl \JL j 1 1 lUll. I TIXX K, II U.1 1 A^ UT CCTTTf^rTTCmTTTT l^' J tltV U. U Li 1 \J\1 , CTTT^Ty TT J U Vl I 

^.-i«-tH«4-«i-t»-v « f «^ j-» ♦ r---i*-«ft-«f^H '~ir-i\ T j-»--i»--i/-»j->ll--if«j-A«-^ i~\ tr rtH j-j m r\-t iTxM f ■! >t i^ i-i I 1 •-» ♦ « .-v «-i f Vi ""i 1 I ^^^ a^ii^^^ T r r^ t ^ r^ n ,-i .-» t «-\ j-i i^tfT <->.--♦ 
tnyn^^^^T^TTT TTT Jl x\J I LIUllDl IL'U , till T IITXI IV k^ LlUllU 1 1 ^7T UliUIIIL.' t Wl tTJ.1 IV"Vl_lLll IVJ FT CTTTtCTr tTV 1 1 Ul_r^ T V^ Itl , crTTTT C7X rT^T k_ 1 1 ^JV. L . 

¥ ^^ »-t/-</-|«t**--\g^ ij^^i ^^^^^j^^^^^^ fj^^^^l Q^^^^ *^^^^^^^^^ ^^i ^^^^^ ^^^^^^^^^^^^^ ^^t ^^^^^ l^^^^^^^^^^^^^i Ui ^^^^^U^^^^^^X ^^^^3^^^^^^i ^^£ V^ j"^ ^ < I t r 

TTT CttWIf^TT^^ t^^^ H^^^ I JUVJ UIWXiT CX»^ I P-f I FVV' l\J TT^W B-' I T 1 L11\J 1 1 l,*! (J.1 If l V^J U %J 1 1 V^ 1 1 LI I L' I L/ L ' U 1 I f ULLI I l\-l^\J ^^T ^^^^CffTTn 

injury covorago bolow tlte minimum limito. when any of the following occur: 

(1) canceUation of the policy; 

(2) material change in the policy; or 

(3) reduction of the available coverage under the policy below the minimum limits set forth in 
Paragraph (b) of this Rule. 

(h) No structural pest control license shall be issued to any person where there exists an outstanding 
and unpaid fmal judg e ment judgment against said person resulting from any civil suit arising out of 
damages suffered by a plaintiff as the result of a misuse of a pesticide by said person. Any current and 
valid structural pest control hcense shall become null and void 1 80 days foUowtng the imposition of a 
fmal judgment awarding damages to any plaintiff resulting from a civil suit arising out of losses suffered 
as the result of a pesticide misuse by the holder of said license unless the final judgment is settled in fuU 
within said 180 days. 

(i) The comimittOQ Committee may accept other evidence of fmancial responsibihty. 

(j) Ptulo .0903 Paragraphs (a) through (i) of this Rule shall not apply to any individual holding an 
inactive hcense as defmed by RtOe .0103(29) Rule .0102(30) of this Chapter. 



Statutory Authority G.S. 106-65.37. 

SECTION .1000 - TIME FOR FILING 
CO\IPL.\INTS 

.1001 TIME FOR FILING COMPL.\INTS 

(a) No disciplinary action against a liconooo, 

be commenced against a licensee, employee of a 
licensee or certified apphcator for any violation 
of these Rules, except those violations specified 
in Paragraph (b) of this Rule, alter two years 
from the act or omission, tfeat- occurred during 
tfee treatment Bf aft#f t4*e expiration »f tb« struc 
twal pe^ control contract, wiiichever i* tfee later. 
e xcept tbat- wrtl* respect te discipUnar>' action al- 
a violation ef Gr&r 106 65.2S(a)( ' 1). th« 



action shall b» commenced ' ■ ' ■ ithin twe years 
from tfee discover^' hy- the Committee ef the al- 
leged facts constituting A** fraud ef miorepreoon 
tation. 

(b) With respect to disciplinary' action alleging 
a violation of GJv 106-65. 28(a)( 1), (2), (4), (7), 
(8) or (11), no disciplinary' action shall be com- 
menced against a licensee, employee of a licensee 
or certified apphcator after t\s'o years from the 
date of discovery by the Di\ision of the alleged 
violation. 

S tammy Authority G.S. 106-65.29. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



334 



PROPOSED RULES 



1\ otice is hereby given in accordance with G.S. 
/50B-2/.2 that the N.C. Structural Pest Control 
Committee intends to adopt rule(s) cited as 2 
N C AC 34 .0407 - .0408. 

1 he proposed effective date of this action is Au- 
gust 3, 1992. 

1 he public hearing will be conducted at 10:00 
a.m. on June 16, 1992 at the Board Room, Agri- 
culture Bldg., 2 W. Edenton St., Raleigh, NC 
27601. 

IXeason for Proposed Actions: To establish 
standards for the storage of pesticides to prevent 
leakage and spills. 

C^ ommeni Procedures: Interested persons may 
present their views either orally or in writing at the 
hearing or prior to the hearing by mail, addressed 
to the Chairman of the North Carolina Structural 
Pest Control Committee, P.O. Box 27647, 
Raleigh, NC 27611. 

CHAPTER 34 - STRL CTLRAL PEST CONTROL 
DIVISION 

SECTION .0400 - PUBLIC SAFETY 

.0407 STORAGE REQUIREMENTS FOR 
PESTICIDES 

(a) Pesticides shall be stored to prevent leaking. 

(b) Pesticides shall be stored to facilitate in- 
spections by the Division. 

(c) Pesticides shall be stored in labeled con- 
tainers. The following information shall be 
clearly and prominently stated on each pesticide 
container: 

( 1 ) manufacturer's complete brand name of 
product; 

(2) percentage of each active ingredient; 

(3) I'P.A registration number; 

(4) signal word; 

(5) use classification (general use or restricted 
use). 

Pesticides which are labeled in accordance with 
the P'ederal Insecticide. Fungicide, and 
Rodcnticide Act (I'IFR.A), the North Carohna 
Pesticide Law of 1971 and rules promulgated 
thereunder shall be deemed to ha\c met the re- 



feed^ food or medicine or any container which 
has previously been used for a beverage, feed, 
food or medicine. 

(e) Pesticides shall not be stored m a manner 
that could cause the contamination of beverages, 
eating utensils, feed, fertilizer, food, medicine, 
other pesticides, seed, tobacco, tobacco products 
or in a manner otherwise likely to result in acci- 
dental ingestion by humans or domestic animals. 

(f) Pesticides shall be stored in accordance with 
label recommendations and requirements. 

(g) Pesticides shall be stored in accordance with 
the label requirements of non-pesticide products 
which are stored in the same storage area as the 
pesticides. 

(h) WTien unattended, pesticides shall be stored 
to prevent unauthorized access. 

(i) Pesticides shall be stored in an area that does 
not accumulate water and that is dr^ and venti- 
lated. 

(i) Pesticide storage areas shall be free of 
combustible materials such as gasoline, kerosene, 
or petroleum solvents other than those associated 
with pesticide apphcation and debris such as 
waste paper, rags, or used cardboard boxes. 
Pesticide storage areas shall be separated from 
operations which present a fire hazard such as 
welding or burning. Appropriate care shall be 
taken to minimize fire hazard p>otential when 
providing supplemental heating to the storage 
area. 

Statutory Authority G.S. 106-65.29. 

.0408 STORAGE REQUIREMENTS FOR 
RESTRICTED USE PESTICIDES 

(a) In addition to the storage requirements set 
forth in Rule .0407 of this Section, restricted use 
pesticides shall be stored in accordance with the 
requirements set forth in this Rule. 

(b) Restricted use pesticides shall be stored so 
as to pre\'cnt unauthorized access to the pesti- 
cides. WTicn unattended, the storage area shall 
be locked. A warning sign shall be posted beside 
all entrances to the storage area which states: 
•PESriCIDE SrORAGE 



SONNEL ONL>. 
CALL 



:x. 



ALTIIORI/ED PER- 



'IN C.\SE OF EMERGENCY 



(c) Restricted use pesticides shall be stored to 
pre\ent contact with water rcsultmg from 
cleanup, the intrusion of storm waters, leaks, 
impounded or flowing waters, or anv other water 
source which represents a likely potential for 
quirements of this Paragraph. flooding. 

(d) Pesticides (formulated products or i^^. lit Restricted use pesticides shall not be stored 

lutions) shall not be stored in anv contamer that within 50 feet honzontally of any pn\ate water 
is specifically designed to contain either beverage, supply. 



535 



:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



it) Restricted use pesticides shall not be stored 
within 100 feet honzontallv of anv public water 
supply. 

(f^ A prefire plan shall be developed for each 
storage area. The plan shall be a description of 
the plans and procedures for management of fires 
involving pesticides. A suggested prcfire plan 
fonmat is the publication, "Pre-Planmng and 
Guidelines for Handling Agricultural I-"ires," re- 
printed by the National Agricultural Chemicals 
Association: 

(1) one copy of the plan approved bv the fire 
department and or emergency services of- 
fice having junsdiction shall be main- 
tained in the office of the licensee or 
certified applicator for inspection bv the 
Division; 

(2) one copy of the plan shall be filed with the 
fire department and or emergency services 
otfice having junsdiction; 
a request shall be made in writing to the 
local fire department and or emergency 
services office ha\ing jurisdiction for no 
less than an annual inspection of the 



m 



(g) The Licensee or certified applicator respon- 
sible for the storage area shall maintain a current 
inventory list by brand name and formulation of 
all pesticides, both general use and rest net ed use, 
stored in the storage area. An inventory' list shall 
be considered current if it is updated every' 30 
days. A copy of the inventory' list shall be 
maintained at a separate location from the stor- 
age area. The inventory list shall be made a\ail- 
able to the Division upon request. 

(h) The licensee or certified applicator respon- 
sible for the storage area shall notif\' the Division 
immediately 



of 



any emergency such as a fire. 



spiU, or unintended release of restricted use pes- 
ticides into the environment from the storage 
area, if the emergency poses a hazard or immi- 
nent danger to man, animals, aquatic life, or 
threat of substantial damage to property . Such 
notification of the Division does not preclude 
notitication being given t£ the appropnate local 
fire department, emergency sen.'ices office, or 
other state or federal agencies requinng such no- 
tification. 

Statutory Authority G.S. 106-65.29. 

****************** 



ly otice is hereby given in accordance with G.S. 
I50B-2I.2 that the N.C. Gasoline and Oil In- 
spection Board intends to amend nde(s) cited as 



2 NCAC42 .0102, .0201, .0401 and adopt rule(s) 
cited as 2 NCAC 42 .080/ - .0806. 

1 he proposed effective date of this action is 
September I, 1992. 

1 he public hearing will be conducted at 9:30 
a.m. on June 26, 1992 at the Jim Graham Meeting 
Room, Jim Graham Building, N.C. State 
Fairgrounds, 1025 Blue Ridge Bhd., Raleigh, NC 
27607. 

l\.eason for Proposed Actions: To establish ox- 
ygen content standards for gasoline. 

(^ omment Procedures: Interested persons may 
present statements either orally or in writing at the 
public hearing or in writing prior to the hearing 
by mad addressed to N . David Smith, Secretary 
of the \orth Carolina Gasoline and Oil Inspection 
Board. P.O. Box 27647, Raleigh, NC 27611. 

CH.VPTER 42 - GASOLINE AND OIL 
INSPECTION BOARD 

SECTION .0100 - PURPOSE AND DEFINITIONS 

.0102 DEFINITIONS 

Except as otherwise defmed in Chapter 119, 
North Carolina General Statutes, the definitions 
applicable in this Chapter are as follows: 
(1) "ASTM" means the American Society for 

Testing and Materials. 
f5) "iVpprovod donaturant(Li)" moaoii materials 
uood fof denaturing s thyl alcohol fef **» as 
a motor fot4 which hav e boon appro' i od by 
Uw> U.S. Dopartmont ef tiie Troasup . ', S«- 
F««i ef iVlcohol, Tobaooo afi4 FirL'ormc aft4 
the diroctor. 
(2] (^ "Approved lead substitute" means an 
EPA registered gasoline additive formulated 
to reduce valve seat recession in engines de- 
signed to operate on leaded gasoline and 
which has been approved by the director. 
Such approval shall be based upon the sub- 
mission of scientific documentation accept- 
able to the director. 

(3) (4} "Board" means the Gasoline and Oil 
Inspection Board. 

(4) fA^ "Cetanc number" means the relative ig- 
nition quality of diesel fuels by the ASTM 
Cetane Method D-613. 

(5) "Control area" means an area of the state 
designated by the Environmental Manage- 
ment Commission pursuant to Title 2 of the 
Clean Air Act /Vmendments of 1^90 in 
which the oxygen content of gasoline is reg- 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



336 



PROPOSED RULES 



ulaled for the purpose of reducing carbon 
monoxide levels. 

(6) "Control area oxygenate blending facility" 
means anv facility at which the oxygen con- 
tent of gasoline is altered, excluding retail 
outlets and wholesale purchaser-consumer 
facilities. 

(7) "Control area terminal" means a terminal 
which is capable of receiving gasoline in 
bulk, e.g., bv pipeline, marine vessel, tank 
truck, or barge, or at vshich gasoline is al- 
tered either in quantity or quality, excluding 
the addition of deposit control additives. 

(8) "Control period" means the period during 
which the ox\gen content of gasoUne is reg- 
ulatcd in anv control area. 



(9) (^ "Denatured fuel ethanol" means ethanol 
meeting the provisions of ASTM D-4806, 
"Standard Specification for Denatured Fuel 
Ethanol to he Blended with Gasolines for 
Use as an Automotive Spark- Ignition En- 
gine Fuel." 

(10) (-3^ "Director" means the director of the 
Standards Division of the North Carolina 
Department of .\griculture. 

(11) "Distributor" means any person who 
tran>ports or stores or causes the transpor- 
tation or storage of gasoline at anv point 
between anv gasoline refiner\' or importer's 
facility and anv retail outlet or wholesale 
purchaser-consumer s facility. 

(12) f*f "EPA" means the L'mted States Envi- 
ronmental Protection Agency. 

I-'H "Gaoolino oxygonutj blond" means a blond 
conoioting pmnanly »f gar . olino aft4 a sub 
F i tantial amount ef e»e Bf- moro oxygonat e s. 
Thif i definition includi?s. btri- i* r«+ limitod 
^ ^Pe& following dL'; . ignationii: 
fa-^ GaL i ohoI moaning afty motor feei con 
taining a nominal hm ' l olum e porcont 
anhydrous denatured othanol aft4 ^ vol- 
w«t* porcont unloaded ga so lino, rogardlooo 
»f other nam ^ . label, b* dosignution. 
fb4 I oadod ga ' ohol moaning aftv motor A*4 
containing a nominal te» solumo porcont 
anhydrous denatured othanol aft4 90 vei- 
Hfftt^ percent l e ad e d gasoline, regardloss &f 
other ncuno. kibol. 6* designation. 
fe4 Aftv gasoline oxygenate blond which moots 

tl» EPA s "Substantially Similar" fhI^ 
(4+ Aftv gasoline oxygonato blend ft*f ' ■ vhich 
there t^ aft existing Clean A+f Aet wai>or 

\ V. I . 11 1 T 1I.U. _"^' I_Li l\J \J A T i,VT nxt\_ Tt^TT^T ^TT^TVI I r^ rT^TT 

subj e ct ^i* I' Pi\ foel requirements, btrt- fef 
V i hich approval ha- been granted by Ae 
board fof sail? i* North CaroUna. 



(13) (40) "Leaded" means any gasoline or 
gasoline-oxygenate blend which contains not 
less than 0.05 gram lead per U.S. gallon 
(0.013 gram lead per liter) or contains an 
approved lead substitute which provides a 
lead equivalency of at least 0.10 gram lead 
per U.S. gallon (0.026 gram per hter). 

(14) (44-^ "Liquefied petroleum gas" means any 
material which is composed predominantly 
of any of the following hydrocarbons or 
mixtures of same: propane, propylene, 
butanes (normal or iso-butane), and 
butylenes. 

(15) (45) ".Motor Octane Number" means the 
number descnbing the relative anti-knock 
characteristic of a motor fuel determined by 
ASTM Motor Method (D-2700). 

( 16) "Non-oxvgenated gasoline" means any 
gasoline which does not meet the dctinition 
of oxygenated gasohne. 

( 17) (44| "Octane Index" means the number 
obtained by adding the research octane 
number and the motor octane number and 
dividing the sum by two. 

(18) "Oxygen content of gasoline" means the 
percentage of oxygen bv weight contained in 
a gasoline, based upon its percentage 
ox\genate by volume, excluding denaturants 
and other non-oxygen-containing compo- 
nents with all measurements adjusted to 60 
degrees Fahrenheit. 

f44+ 'Oxygenate" m e ans a» oxygon containing, 
ashless organic compound, such as aft alco 
b€4 »F aft other, which may b« used as a foe! 
ef a fed- supplement. 

(4-5^ "Oxygenated fuel" moans a liquid fe^ 
which » a homogeneous blend ©f 
hydrocarbons aft4 oxygenates. 

( 19) "Oxygenate" means anv substance which, 



when added to gasoline, m creases the 
amount of oxygen m that gasoline, and 
which either complies with the "Substan- 
tiallv Similar" rule under Section 21 1(f)(1) 



of the Clean Air Act . or is permitted under 
a wai\er granted by F PA. 
(20] "Ox\ genated gasoline" means anv gasoline 



contaming a substance which adds oxygen 



to that gasoline 



(21 



(22 



I (-44+ "Qualitative word or term" means any 
word or term used in a brand name which 
by definition or customary usage indicates a 
level of qualit\', classification, grade, or des- 
ignation. 

I (4^ "Regular" when used as part of a 
brand name and or as a grade designation 
for gasoline or gasoUne-oxygenate blend 
shall be construed to mean a leaded regular 
grade commercial automotive gasoline or 



ii; 



7:4 NORTH CAROLISA REGISTER May 15, 1992 



PROPOSED RULES 



gasoline-oxygenate blend unless the brand 
name and/or grade designation also contains 
the word "Unleaded" or a word or term of 
equivalent meaning. 

(23) (4^ "Research Octane Number" means 
the number describing the relative anti- 
knock characteristic of a motor fuel deter- 
mined by ASTM Research Method 
(D-2699). 

(24) "Reseller" means any person who pur- 



chases gasoline and resells or transfers it to 
a retailer or a wholesale purchaser- 
consumer. 

(25) "Retail outlet" means any establishment 
at which gasoline is sold or offered for sale 
to the ultimate consumer for use in a motor 
vehicle. 

(26) "Retailer" means any person who owns, 
leases, operates, controls or supervises a re^ 
tail outlet. 



(27) fW) "Substantially Similar" rule means the 
U.S. Environmental Protection Agency's 
"Substantially Similar" rule. Section 211 (f) 
(1) of the Clean Air Act [42 U.S.C. 7545 (f) 

(28) "Terminal" means a facility at which gas- 
oUne is sold, or dispensed into trucks for 
transportation to retail outlets or wholesale 
purchaser-consumer facilities. 

(29) (30) "Total alcohol" means the aggregate 
total in volume percent of all alcohol con- 
tained in any fuel defmed in this Chapter. 

(30) (244 "Total oxygenate" means the aggre- 
gate total in volume percent of all 
oxygenates contained in any fuel defmed in 
this Chapter. 

(31) (33) "Unleaded" means any gasoline or 
gasoline-oxygenate blend to which no lead 
or phosphorus compounds have been in- 
tentionally added and which contains not 
more than 0.05 gram lead per U.S. gallon 
(0.013 gram lead per Uter) and not more 
than 0.005 gram phosphorus per U.S. gallon 
(0.0013 gram phosphorus per liter). 

(32) "Wholesale purchaser-consumer" means 
any organization that is an ultimate con- 
sumer of gasoline and which purchases or 
obtains gasoline from a supplier for use in 
motor vehicles and receives delivery of that 
product into a storage tank of at least 
550-gallon capacity substantially under the 
control of that organization. 

ASTM documents referred to in this Rule are 
hereby adopted by reference, ift accordanc e Vrrth 
StSt 150B 1 l(o) including subsequent amend- 
ments and editions, and are available for in- 
spection in the Office of the Director of the 



Standards Division. Copies of these documents 
may be obtained from the ASTM, 1916 Race 
Street, Philadelphia, PA 19103, at a cost deter- 
mined by ASTM. 

Statutory Authority G.S. 1 19-26. 

SECTION .0200 - QUALITY OF LIQUID FUEL 
PRODUCTS 

.0201 STANDARD SPECIFICATIONS 

(a) The Board hereby adopts by reference, ift 
accordanc e with G.S. 150B M(c), including sub- 
sequent amendments and editions, ASTM 
D-4814, "Standard Specification for Automotive 
Spark-Ignition Engine Fuel" as standard specifi- 
cation for gasoline with the following modifica- 
tions: 

(1) Applications for temporary exceptions to 
vapor pressure and vapor/liquid ratio 
specifications as provided in this Subpar- 
agraph may be made to the director. Said 
applications shall contain evidence satis- 
factory to the director that outlets mar- 
keting gasoline in North Carolina cannot 
feasibly be suppUed from bulk terminals 
furnishing specified volatility level gasoline 
or that customary sources of supply have 
been temporarily interrupted by product 
shortage and alternate sources furnishing 
specified volatiUty level gasoline are not 
available. Such temporary exceptions 
granted shall apply only until the next 
meeting of the board at which time the 
board shall estabfish the duration of the 
exception; 

(2) The minimum lead content for gasoline 
registered and/or labeled as "leaded" or 
"regular" shall be as defined in Rule 
.0102(10) of this Chapter; 

(3) Raid vapor Vapor pressure and 
vapor, liquid ratio seasonal specifications 
as listed in this Subparagraph may be ex- 
tended for a maximum period of 15 days 
to allow for the disbursement of old 
stocks. However, new stocks of a higher 
volatility classification shall not be offered 
for retail sale prior to the effective date of 
the higher volatility classification. 

(b) The Board hereby adopts by reference, ift 
accordanoo \\\\\\ G.S. 150B M(o), including sub- 
sequent amendments and editions, AS l.M 
D-4814, "Standard Specilication for Automotive 
Spark- Ignition Engine Fuel" as standard specifi- 
cation for gaoolinO ' OKVgonato alcohol blends with 
the following modifications: 

(1) A vapor pressure tolerance not exceeding 
one pound per square inch; may h% al- 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



33S 



PROPOSED RULES 



(2) 



(3) 



lowt'd fef gapohol, loaded gasohol. aft4 
gai . olino oxygonato blondu; 

PvL'id vapor Vapor pressure and 
\apor, liquid ratio seasonal specifications 
as listed in this Subparagraph may be ex- 
tended for a maximum period of 15 days 
to allow for the disbursement of old 
stocks. However, new stocks of a higher 
volatility classification shall not be offered 
for retail sale prior to the effective date of 
the higher volatility classification; 
Apphcations for temporary exceptions to 
\'apor pressure and vapor/liquid ratio 
specifications as provided in this Subpar- 
agraph may be made to the director. Said 
applications shall contain evidence satis- 
factory to the director that outlets mar- 
keting gasoline in North Carolina cannot 
feasibly be supplied from bulk terminals 
furnishing specified volatility level gasoline 
or that customary sources of supply have 
been temporarily interrupted by product 
shortage and alternate sources furnishing 
specified volatihty level gasoline are not 
available. Such temporary exceptions 
granted shall apply only until the next 
meeting of the board at which time the 
board shall establish the duration of the 
exception; 

fhe minimum temperature at 50 percent 
evaporated shall be 158 degrees F. (70 
degrees C.) as determined by ASTM Test 
Method D-86; 

The minimum lead content for 
gasoline/oxygenate blends registered 
and or labeled as "leaded" or "regular" 
shaU be as defmed m R«k. .0I02( lOr Rule 
.0102 of this Chapter; 
Octane rating shall not be less than the 
octane index certified on the brand name 
registration as required by 2 NCAC 42 
.0500; 
Oxygenate Content. 

fA-^ (JQi p ohol aft4 leaded gasohol ' ihall con 
triift 44 plur . minus Or^ i i olumo perc e nt 
d e natured foel- ethanol. 

f6-^ Gaiioline oxygenate blends h©* other 

" i - ' V \A\^ 1 1 1 1 l^TJ III 1 1 1 1 V' ^ IIUl*l\, I , 1 1 TVt ~ t^_?I I lUU ~ 

maximum e* minimum a* appropriate, 
l4^ percentage »ft4 type ef oxygenates as 
certified ©» Ae brand nam e registration 
a* required by J NCAC 4^ Mi^ subject 
te compliance Vr4t4* other specifications ae 
pro>ided » \k»y Subparagraph: 
(7) All blends, both leaded and unleaded, shall 
be blended accordmg to the IPA "Sub- 
stantiallv Similar" rule or an f.PA \vai\er 



(4) 



(5) 



(6) 



{=h 



for unleaded fuel; 



(8) Water tolerance shall be such that no 
phase separation occurs when subjected 
to a temperature equal to the temper- 
atures specified in Table 4, ASTM 
D-4814. 

(c) The Board hereby adopts by reference, ift 
accordanc e witfe G.S. 150B 1 1(c), including sub- 
sequent amendments and editions, ASTM 
U-975, "Standard Specification for Diesel Fuel 
Oils" as standard specification for diesel motor 
fuels with the following modification: For diesel 
motor fuel grade 2-D, the minimum flash point 
as determined by ASTM Test Method D-56 shall 
be 1 15 degrees F. (46 degrees C). 

(d) The Board hereby adopts by reference, ift 
aocordanoo with G.S. 150B M(c), including sub- 
sequent amendments and editions, AST.M 
D-396, "Standard Specification for Fuel OUs" as 
standard specification for fuel oils. 

(e) The Board hereby adopts by reference, ift 
acoordanco with G.S. 150B 1 1(c), including sub- 
sequent amendments and editions, ASTM 
D-3699, "Standard Specification for Kerosene" 
as standard specification for kerosenes with the 
foOowing modification: For grade 2-K, the 
presence or absence of coloring matter shall in 
no way be determinative of whether a substance 
meets the requirements of this grade of kerosene. 

(f) In addition to meeting all specitication re- 
quirements as set forth in this Rule, each fuel 
must be suitable for the intended use. 

(g) ASTM documents adopted by reference 
herein are available for inspection in the Office 
of the Director of the Standards Division and 
may be obtamed at- a e»*4 a* detennined by tb« 
publisher by contacting from ASTM, 1916 Race 
Street, Philadelphia, PA 19103, at a cost deter- 
mined by ASTM. 

Statutory Authority G.S. J/9-26; 150B-14. 

SECTION .0400 - DISPENSING DEMCES AND 
PLMPS 

.0401 LABELING OF DISPENSING DEVICES 

(a) For the purpose of product identity, each 
dispensing device used in the retailing of any 
motor fuel shall be plainly and conspicuously la- 
beled with the following: 

( 1) for gasoline, the registered brand name; 

(2) for diesel fuel, the registered brand name 
plus a descriptive or generic label if the 
registered brand name does not ade- 
quatcl_\- identify the type and or grade of 
product. 

(4) fof gasoline oxygenate blends containing 
at- least eee percent by volume »f ethanol ? 
methanol, &f combination. Ae re ' -dnter e d 



i}9 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



t_Ti mRJ riTTTTT^ I-.' 1 LI J Ul 1 UVJ U 1 1 1 VJ 1 1 U.1 iTTTT^Tr tTTTT^'TT 

otatos Aat- ^ blond "contains alcohol," 
"contains othanol," "containo mothanol," 
eF "contains othanol/mothanol." The la- 
bel- shall b*» composod »f lottors at- least 
©fte ifteh- m height, minimum ono eighth 
ifteh- stroke, V i 'hich contrast distinctly witfe 
the label background aft4 shall be affixod 
te- the dispenser front pan e l in- a position 
clear aftd conspicuous from the drivor'o 
position. Exceptions te this Rule afe^ 

/ A \ -f j-^ T- tli^ilo r\ r~i^ j-n-\ t Ti-\rr\.-\ 1-n r -i r\ l■^ U A 1 1 f <-n T If^j* 

fT^7 iTTr rT^^^^ ^^CTT t^_T F VT VTT "j CfIT l-J 1 I~ TT UI T V I j 

the additional label shall identify the p^f- 
6e»t by- volum e ©f othanol and/or 
mothanol m the bl e nd. 
fS) fof fuels mooting the EPA's "Substan 
tially Similar" fwle and which de- Bet 
contain othanol ©f mothanol, He addi 
tional label i« required. 

(b) Each dispensing device used in the retailing 
of products other than motor fuel shall be 
plainly and conspicuously labeled as follows: 

(1) Kerosene shall be labeled as either 1-K 
Kerosene or 2-K Kerosene. In addition, 
each dispenser shall contain one of the 
following legends as appropriate; 

(A) On 1-K kerosene dispensers, the legend 
"Suitable For Use In Unvented Heaters". 

(B) On 2-K kerosene dispensers, the legend 
"May Not Be Suitable Eor Use In Un- 
vented Heaters". 

(2) Other products shall be labeled with either 
the applicable generic name or a brand 
name which identifies the type of product. 

(c) Whenever a motor fuel or other product 
provided for in this Section is offered for sale, 
sold, or delivered at retail in barrels, casks, cans, 
or other containers, each container shall be la- 
beled in accordance with this Section and in ac- 
cordance with 15 U.S.C. 1451 et. seq. 

(d) If a dispenser is so designed that two or 
more hose/nozzles which are connected to a 
common housing dispense more than one type 
or grade of product, means shall be provided to 
clearly indicate the identity of the product being 
dispensed from each hose/nozzle. 

Statutory Authority G.S. 119-27. 

SECTION .0800 - OXYGENATED GASOLINE 

.0801 PLRPOSE AND APPLICABILITY 

(a) This Section sets forth oxygenated gasoline 
standards for areas dcsi.anatcd by the Environ- 
mental Management Commission as carbon 
monoxide nonattainmcnt areas pursuant to Title 
H of the 1990 Amendments to the I'ederal Clean 
Air Act and regulations promulgated by the 



EInited States Environmental Protection Agency. 
The requirements of this Section apply to all 
gasoline offered for sale, sold, exchanged, or dis- 
pensed as a fuel for use in a spark ignition engine 
in a control area during a control period, except 
for gasoline intended for use in aircraft. 

(b) The requirements of this Section apply to 
the following control areas: 

(1) The Raleigh/ Durham MetropoUtan Sta- 
tistical Area consisting of Durham, 



(21 



ill 



Eranklin, Orange, and Wake Counties; 

The Greensboro 'Winston-Salem/ High 
Point Metro pohtan Statistical Area con- 
sisting of Davie, Davidson, Eors\lh, 
GuUford, Randolph, Stokes, and Yadkin 
Counties; 



Any other areas designated by the Envi- 
ronmental .Management Commission. 
The requirements of this Section do not apply to 
areas which have been removed from designation 
as carbon monoxide nonattainmcnt areas by the 
Environmental Management Commission. 

(c) The control period is a four month period 
beginning November J^ and running through the 
last day of February of the following year. 

(d) Gasoline in storage within the counties 
identified in Paragraph (b) of this Rule prior to 
November 1 at a retail outlet or wholesale 
purchaser-consumer dispensing facility having 
total gasoline tank capacity of less than 550 gal- 
lons or a total weekly dispensing rate of less than 
550 gallons is exempt from the requirements of 
this Section. However, any gasoline suppUed to 
the retail outlet or wholesale purchaser-consumer 
facility during the control period shall comply 
with the requirements of this Section. 

(e) If the Administrator of the U.S. Environ- 
mental Protection Agency delays the effective 
date of the oxygenated gasoline requirements 
then the provisions of this Section do not apply 
during such period. 

Statutory Authority G.S. J 19-26. 

.0802 OXYGEN CONTENT 

In addition to the requirements in Section .0200 
of this Chapter, the gasolme identified in Rule 
.0801 of this Section shall ha\e an oxygen con- 
tent of not less than 2.7 percent by weight. 

Statutory Authority G.S. / 19-26. 

.0803 RECORD KEEPING AND TRANSFER 
REQUIREMENTS 

(a) AH parties in the gasoline distribution net- 
work, as described in this Rule, shall maintain 
records containing compliance information enu- 
meratcd or described in this Rule. These records 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



340 



PROPOSED RULES 



shall be retained by the regulated parties for at 

least one year. 

( 1) Control area terminal operators. Persons 
who own, lease, operate or control gaso- 
line terminals which sen,'e control areas 
shall maintain records containing the fol- 
lowing information: 



(A) rhe owner(s) of each batch of gasoline; 

( B) For all batches or truckloads of gasoline 

lea\ing the terminal, the volume of gaso- 



line^ the type of ox\'genate(s), and mini- 
mum oxygen content of the batch or 
tnickload; 



(C) Destination of each tank truck sale or 
batch of gasoline, that is^^ whether it was 
within a control area or not; 

(D) The name and address of the party to 
whom the gasoline was sold or transferred 
and the date of the sale or transfer. 



(2) Control area oxygenate blenders. Persons 
who own, lease, operate or control facili- 
ties at which the ox\ szen content of gaso- 



line is altered and which serve control 
areas shall maint^iin records containing the 
following information: 



(A) The owner(s) of each batch of gasoline; 

(B) For all batches or truckloads of 
ox\2enated easolme lea\ing the terminal. 



the volume of oxygenated gasoline, the 
type of oxy£enate(s), and minimum oxy- 



gen content of the batch or truckload; 



Destination of each tank truck sale or 



batch of easohne. that is^ whether it was 
within a control area or not: 
(D) Fhc name and address of the party to 
whom the ox\genated gasoline or 
oxygenate(s) was sold or transferred and 
the date of the sale or transfer. 
(3) Retailers and wholesale purchaser- 

consumers within a control area must 
maintain the following; records: 

(A) Ihc names :ind addresses of the parties 
from whom all shipments of gasohnc were 
purchased or reccned, and the dates when 
the\' were recei\'ed: 

(B) Data on cver>' shipment of gasoline 
bought, sold or transported, including: 

(i) \"olume of each shipment; 

(li) Type of oxygenate(s) and oxygen 
content: 

(iii) Destination of each sale or shipment 
of gasoUne. that is^ whether it is nv 
tended for use within a control area. 



(b) Each time that physical custody or title of 
gasoline destined for a control area changes 
hands other than when gasoline is sold or dis- 
pensed for use in motor vehicles at a retail outlet 
or wholesale purchaser-consumer facihtv, the 
transferor shall pro\ide to the transferee, m addi- 
tion Ux or as part of, normal bills of lading, in- 
voices^ etc., document(s) which clearly and 
conspicuously contams the following information 
on that shipment: 

( 1) The date of the transfer: 



111 
til 

ih 
{§1 



Ihe name and address of the transferor; 



The name and address of the transferee; 



The volume of gasoline which is being 
transferred; 

The proper identification of the gasoline 
as non-oxygenated or oxNgenated; 
Type of oxygenate(s) and minimum oxy- 
gen content. 
Such document(s) shall accompany ever.' ship- 
ment of gasoline to a control area after it has 
been dispensed by a tcrmmal or control area 
ox\ senate blending facilitv. or the information 
shaU be included in the normal paperwork which 
is generated subsequent to the shipment of gaso- 
line from a terminal or control area ox\ genate 
blendmg facilitv. 



Stalutory- Authority G.S. 119-26. 

.0804 GASOLINE DISPENSER LABELING 

(a) Each gasoline dispenser stand from which 
oxygenated gasohne is dispensed at a retail outlet 
in the control area shall be affixed dunng the 
control period with a legible and conspicuous la- 
bel which contains the following statement: 
gasoline dispensed from 



-The 



this pump is 
o.vygcnated and will reduce carbon monovide 
emissions from motor vehicles/^ 

(b) The posting of the statement in Paragraph 
(a) of this Rule shall be in block letters of no less 
than 36-point bold t\pe: in a color contrasting 
with the intended background. The label shall 
be placed in the \'ertical surface of the dispenser 
front panel in a position clear and conspicuous 
from the dri\ er s position. 

(c) The retailer shall be responsible for com- 
pliance with the labeling requirements of this 
Section. 

Statuton Authority G.S. J 19-27. 



.0805 S.VMPLING, TESTING AND OXYGEN CONTENT CALCULATIONS 

(a) Sampling methodologies used to determine compliance with this Section shall be those set forth 
in Appendix D of "litle 40. Part SO of the Code of Federal Regulations, wliich is adopted bv reference, 
including subsequent amendments and editions. Copies of the ("ode of Federal Regulations ma\ be 
obtamcd from the Go\ emment Pnntmg OtTice. W'ashmgton. D.C. at a cost determmed bv that oflice. 



341 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



(b) Determination of the oxvgenate(s) and their volume in gasoline shall be in accordance with test 
method ASTM D 4815 as set forth in ASTM specification D 4814. 

(c) Oxygen content shall be calculated by multiplying the mass concentration of each oxygenate in 
gasoline by the oxygen molecular weight contribution of the oxygenate. All volume measurements 
shaU be adjusted to 60 degrees Fahrenheit. For the purpose of calculating oxygen content, the fol- 
lowing oxygen molecular weight contributions shall be used. 

Oxygen molecular Specific gravity 

Oxygenate weight contribution at 60 de.grees F 

Methyl Alcohol 0.4993 0.7963 

Ethyl Alcohol 0.3473 0.7939 

n- Propyl .Alcohol 0.2662 0.8080 

Isopropyl Alcohol 0.2662 0.7899 

n-Butvl Alcohol 0.2158 0.8137 

Isobutyl Alcohol 0.2158 0.8058 

sec- Butyl Alcohol 0.2158 0.8114 

tertiary- Butyl Alcohol 0.2158 0.7922A 

Methyl tertiary-Butyl Ether 0.1815 0.7460 

Ethvl tertiary- Butvl Ether 0.1566 0.7452 

tertiary-Amyl Methyl Ether 0.1566 0.7752 

tertiary- Hexyl Methyl Ether 0.1377 0.7860 

^ Extrapolated, below freezing temperature. 

Statutory Authority G.S. 1 19-26. 



.0806 COME'LIANCE AND ENFORCEMENT 

(a) During the first 10 days of the control pe- 
riod, gasoline at retail and wholesale purchaser- 
consumer facUities will be deemed in compliance 
provided documentation on all deliveries during 
the five days preceding the control period indi- 
cates that all ga.soline delivered to said facihties 
compUed with Rule .0802 of this Section. 

(b) Gasoline found not to be in compliance 
with the requirements of this Section will be or- 
dered off sale or removed from use. 

(1) The gasohne may be returned to sale or 
use once the owner has blended the gaso- 
line with additional oxygenates sufficient 
to comply with the oxygen content 
standard of this Section, provided this 
procedure is supervised by the director 
and is in accordance with Cj.S. 1 19-27. 

(2) The gasoline may be transferred for use 
outside a control area, provided the record 
keeping requirements of Rule .0803 of this 
Section are followed and the transfer pro- 
cedure is supervised by the director in ac^ 
cordance with G.S. 1 19-27. 



tends to amend rule(s) cited as 2 NCAC 52B 
.0401. .0405; repeal rulefsj cited as 2 NCAC 52B 
.0402 - .0404: and adopt rule(s) cited as 2 NCAC 
52B .0406 - .0413. 

1 he proposed effective date of this action is Au- 
gust 3, 1992. 

1 he public hearing will be conducted at 10:00 
a.m. on June 15. 1992 at the Gov. James B. Hunt, 
Jr. Horse Complex (Restaurant), 4601 Trinity 
Rd., Raleigh. NC 27607. 

ixeason for Proposed Actions: To prevent the 
spread of equine infectious anemia, a disease that 
affects horses and other equine. 

(^ omment Procedures: Interested persons may 
present their statements either orally or in writing 
at the public hearing or in writing prior to the 
hearing by mail addressed to David S. McLeod, 
Secretary of the North Carolina Board of Agri- 
culture. P.O. Box 27647, Raleigh. NC 27611. 



Statutory Authority G.S. 119-26; 119-27. 



*-k*-k-k-k-k-k-k-k-k-k-k*-k-k-k-k 



CHAPTER 52 - VETERINARY DIVISION 
SLBCHAPTER 52B - ANIMAL DISEASE 



ly otice is hereby given in accordance with G.S. 
I50B-21.2 that the N.C. Board of Agriculture in- 



SECTION .0400 - EQl INE INFECTIOUS 
ANEMIA (EIA) 

.0401 DEFINITIONS 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



342 



PROPOSED RULES 



The following definitions are in effect through- 
out Section .0400 of this Subchapter: 
(Ij Horw. Equine. An\ member of the equine 
family, includmg horses, ponies, mules, asses 
and other equines; 

(2) Reactor. A horc e An equine over ftifte six 
months of age that reacts positively to an 
approved test for equine infectious anemia; 

(3) Approved Test. /Vny test for equine infec- 
tious anemia approved by the State 
Veterinarian; At present, an approved test is 
one recognized by Veterinarv Services, 
APHIS, USDA; 

(4) Date of Test. Date blood sample is col- 
lected from the hori e : equine; 

(5) Licensed Accredited Veterinarian. A 
\eterinarian licensed to practice in North 
Carolina by the North Carolina Veterinary 
Medical Board; 

(6) Exposed Horso. A horo»» Equine. An 
equine which the State Veterinarian or his 
authorized representati%'e has reasonable 
grounds to belie\e has been exposed to 
equine infectious anemia; A hor^ . a An 
equine shall be considered exposed when m 
the professional judgment of a state or 
federally employed, or accredited, 
veterinarian designated by the State 
\'eterinarian, the hor ' n? equine has been ex- 
posed. A premise wiii may be approved by 
the State Veterinarian for the permanent 
quarantine of a horw an equine which is 
positive to an official test for equine infec- 
tious anemia when it can be determined that 
other horses equine will not be exposed to 
the disease: 

(7) Division. \'eterinar\" di\ision of the North 
Carolina Department of Agriculture; 

(8) Dealer. .Any person who buys horses 
equine for his own account for the purpose 
of resale, or for the account of others. 

Statutory Authority G.S. ! 06-405. H. 

.0402 DISPOSITION OF REACTORS 

fa-^ Any horso vrhich ** positi' i o Ve aft approved 
t^^ t++f oquino inf e ctious anemia shall be plac e d 
under permanent quarantin e en* rt* hom e farm 
Bf other promise appro ' ■ od by t4*e Slat e 
\"etonnanan. provided ^^ State \'eterinurian 
ft»y authon/e tb«» mo' i enx'nt t4 aft alTected afti- 
Hwl Wr aft approved facility fof (*se wt re '.e arch Bf- 
te- state t+f federal appni' . od slauglil e r facility. 
R.eactQrs shall be identified ' ■ viihm ^ days b^ a 
positive te^t- by a permanent Itf* tattoo number 
pr e scnbed by t4^ Stat e \'etennanan at- tbe e^t- 
pensQ &f Ae ov i uer e* by other means ©f iden 



tification acceptable te tfee State Veterinarian at 
public oxpenoo. 

f^ 44w StatQ \'etorinarian wili authorize the 
mc ie ment »f aft affected animal to- a» approved 
facility fef H«e i» research »f te a state &f federally 
approved slaughter facility wh e n » hi* judgment 
i4- ea» be done without risking tl*e e xposure ef 
other animals, t+p tattoos with figures at- least- 

O r\ i\ 1 r't . • n n 1 ^n f\T !A h r "^ II i \ on t htt ^^^^ r-. .-^ /-» n£ ^\-\n 

\Jll\J ITTCTT TTTZZTT CT CT TTTOTT^T ^TTT ITIV 1\- 1 1 Jl tJ.^^ t_TT TTlW 

neck V i ith throo inch figur e s aft4 conoisting ef 
-^^A followed by a» assigned serial number are 
approved by tfee State Veterinarian fof identifying 
horses vs ' hich afe positive te aft official test fof 
oquino mfectiouo anemia. 

Statutory Authority G.S. 106-405.17. 

.0403 EXPOSED MORSES 

Horses which have been exposed te- t4*e disease 
shall be placed under quarantine until they have 
passed a negative test fof e quine infectious 
anemia following a post exposure interval ap- 
proved by tbe State Veterinarian. 

Statutory .Authority G.S. 106-405.17. 

.0404 REPORT OF TEST RESULTS 

Ail- test r e sults shall be report e d te- tbe office ef 
the Stat e \"eterinanan. Tests conducted at aft 
approved laboratopy within tbe stat e shall be Fe- 
port e d <*ft oiTicial forms suppUed by tbe Division. 
Licensed veterinanans submitting samples fof 
testing ift U.S. D e partment »f Agriculture ap- 
proved laboratories outside &f North Carolina 
shall supply a copy »t tbe test record t» tbe office 
e4^ tbe State \'etennarian within fbre days upon 
receipt e+' tbe test results from tbe testing labora 

Statutory .Authority G.S. 106-405.17. 

.0405 FEES FOR BLOOD TEST 

fa^ A person submitting a blood sample to be 
tested for E4A equine infectious anemia f E L'\) 
shall pay a fee of three dollars (S3. 00) four dollars 
(S4.nO) per sample. 

fb4 4ie Division shall Het test a blood sampl e 
f»f b4A unless tbe payment is submitted along 
with tbe sample. 

Statutory Authority G.S. 106-405.17. 

.0406 EI.\TEST RFQLIRED 

(a) All equine more than six months of age 
entering North Carolina for an\" purpose other 
than for immediate slauizhter shall be accompa- 
nied bv a copy of the certificate of test from a 
laboratory approved bv the LSD.V showing the 



345 



7:4 .\ORTH CAROLISA REGISTER Mav 15, 1992 



PROPOSED RULES 



animal to be negative to an approved test for 
equine infectious anemia (ElA) within the past 
12 months. (See 2 NCAC 52B .0206 for other 
importation requirements.) 

(b) No equine shall be sold, offered for sale, 
traded, given away, or moved for the purpose of 
change of ownership unless accompanied by the 
original official negative test for HIA adminis- 
tered within six months prior to sale or move- 
ment, except that equine which arc offered for 
sale at auction markets or sales may have a blood 
sample drawn at the market by the market's 
veterinarian at the seller's expense. In such cases, 
the equine may be sold and transferred contin- 



gent upon receipt of an oflicial negative EIA test, 
(c) An EIA test shall not be required for: 

(1) North Carolina equine that are intended 
for slaughter and are branded and sold in 
accordance with Rule .0412 of this Sec- 
tion; and 

(2) Equine from other states that are delivered 
directly to a livestock market and branded 
and sold for slaughter in accordance with 
Rule .0412 of this Section, l^quine enter- 
ing pursuant to this provision must be 
accomparued by a waybill. Out-of-state 
equine must be declared prior to entry 
into the sale bam. 

Statutory Authority G.S. 106-405.17. 

.0407 TESTING FOR EIA 

(a) Equine tested for equine infectious anemia 
(EIA) must be completely and accurately identi- 
fied by a licensed, accredited veterinarian, using 
the official test forms provided by the office of 
the State Veterinarian. 

(b) Only one chart shall be utilized by the 
testing veterinarian for each equine to be tested. 
Any distinctive markings and their location on 
the animal such as brands, tattoos, stars, snips, 
stockings, or other markings shall be noted on 
the official chart. 

(c) Equine receiving on-farm or private treaty 
test shall not be sold or ownership otherwise 
transferred until the results of the equine infec- 
tious anemia test performed on the animal are 
retumed. Positive test results shall automatically 
result in the quarantine of the animal without 
further notice at the premises of the owner or 
where the test was conducted. 

(d) All test results shall be reported to the office 
of the State Veterinarian. Tests conducted at an 
approved laboratory within the stale shall be re- 
ported on official forms suppUed by the Division. 
Licensed, accredited veterinarians submitting 
samples for testing in I'.S. Department of Agri- 
culture approved laboratories outside of North 



Carolina shall supply a copy of the test record to 
the oflice ol' the State Veterinarian within five 
days upon receipt of the test results from the 
testing laboratory. 

(e) The owner or manager of a market or sale 
shall announce, prior to the sale or auction, that 
all nonslaughter equines will be tested. Each 
buyer of a nonslaughter equine at the sale or 
auction shall sign an agreement to maintain such 
equine at a specified location until notified of the 
results of the test. Equine that prove negative to 
the test may move in noimal trade channels. 
Owners of equine that react to the test must 
comply with Rule .0408 of this Section. 

Statutory Authority G.S. 106-405.17. 

.0408 POSITIVE REACTORS 

(a) Equine testing positive to an approved test 
for equine infectious anemia (EIA) may have a 
confirmatory retest by a representative of the 
State Veterinarian within 15 days of the initial 
test. If there is no retest within 15 days from 
notification, the right to retest is forteited and the 
equine shall be branded immediately. 

(b) Reactors must be branded on the left side 
of the neck with the characters '55A' and the of- 
ficial reactor number assiened bv the Division. 



Ihe owner of the reactor must submit the equine 
for branding by a representative of the State 
Veterinarian within 15 days of the confirmatory 
test. 

(c) A reactor shall be isolated or sold for 
slaughter within seven days of branding. Reac- 
tors shall be subject to the following disposition, 
at the option of the owner: 

( 1) With approval of the State Veterinarian 
or his designated representative, the 
equine may be sold for slaughter to bona 
fide slaughter buyers. EIA reactors must 
be permitted on VS Eorm 1-27 bv a rep- 
resentative of the State Veterinarian for 
movement from farm to an approved 
slaugliter establishment or research facility 
when, in the State Veterinarian's judg- 
ment, it can be done without risk of ex- 
posure of other equine; 

(2) Quarantine of the infected, branded, 
equine until death in an isolation facility 
on the owner's premises or elsewhere, ap- 
proved by an authorised representati\'e of 
the State Vetcrinanan. A written 
quarantine will be issued for each equine. 
Mimmum standards for an appro\ed iso- 
lation facility shall be a plot or pasture 
located a minimum of 880 yards from any 
other equine enclosure, or other equine, 
except another known EIA reactor. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



344 



PROPOSED RULES 



Owners of infected, branded equine shall 
not sell, barter, trade or give away these 
equine except as provided in this Rule. 

Statutory Authority G.S. 106-405.17. 

.0409 ADJACENT EQUINE 

When an equine is found positive by an ap- 
proved equine infectious anemia (FIA) test and 
an PIA retest by state personnel, aU equine on 
the same premises (farm, pasture, or stable), and 
all other equine located on adjacent farms, 
pastures, or stables within 880 yards shall be re- 
quired to be olTicially tested by state regulatory 
personnel or a licensed, accredited vetennarian. 
All exposed equme on the same farm shall be 
quarantined until officially tested and found neg- 
ati\'e to the F I.\ test 60 days after removal of the 
reactor. 

Statutory Authority G.S. 106-405.17. 

.0410 MARKET AND SALE RESPONSIBILITY 

(a) Livestock markets and all others conducting 
sales of equine shall: 

(1) Send a written request for approval of all 
sales to the State Veterinarian at least two 
weeks pnor to sale; and 

(2) Obtain written approval from the State 
\'eterinanan pnor to conducting the sale. 

(b) Livestock markets or equme sales offering 
to provide equine infectious anemia (LIA) testing 
for North Carolina equine must employ a li^ 
censed, accredited \ctcnnarian, approved by the 
State Vetennarian. 

(c) Li\'estock markets or sales that have ap- 
pro\ed, permanent facilities and stalf, including 
an approved licensed, accredited \eterinarian, 
may handle North Carolma equine that do not 
have a negati\e test, provided each such North 
Carolina equine is tested as provided in these 
Rules. 

(d) Livestock markets and all others conducting 
sales of equine shall have check-m procedures, 
including at least the following: 

( 1) See that the correct name and mailing ad- 
dress of the ouner is on the "check-m" 
form, along with the license number of the 
vehicle that transported the animal; 

(2) Apply a backtag or paint number at 
"check-in" and note it on the "check-in" 
form; 

(3) See that all 1 I . \ test records are collected 
and presented to the market veterinanan 
or rcpresentati\e of the State Vctmnanan 
for vcntication pnor to the sale. 

(e) Equine shall be presented to the market or 
sale veterinarian if testing is required, and assist- 



ance shall be provided for drawing blood samples 
for the LIA test. 

(f) The market or sale management is respon- 
sible for collecting the fee established by 2 NCAC 
52B .0405 for each equine tested for EIA. 

(g) The market or sale management shall 
maintain records of sales for a minimum of two 
years, so that animals that react positively to the 
HIA test may be traced. 

(h) Those managing the sale shall not permit 
the sale of equine on the premises except through 
the market or sale. 

(i) Non-compliance with these Rules is 
grounds for revocation of approval to conduct 
sales. 

Statutory Authority G.S. 106-405.17. 

.041 1 MARKET OR SALE VETERINARIANS 

(a) Market or sale veterinarians shall: 

(1) Collect blood samples of five cubic centi- 
meters in an approved tube with proper 
identification of each equine presented for 
test; 

Properly identify each equine tested on 
Department of Agriculture forms as to 
name, age, sex, breed, color and markings, 
brands, tattoos, scars, etc.; and 

.Mail blood and charts to Rollins 
veterinary diagnostic laborator\- within \2 
hours of sale. 

(b) Each market veterinarian involved in the 
equine infectious anemia (EI.A) program shall 
have a signed approval from the State 
Veterinarian. 



(21 



Ql 



Statutory Authority G.S. 106-405.17. 

.0412 EIA TEST WAIVER/SLALGIITER 

(a) Equine sold at the stockyard for slaughter 
may have the equine infectious anemia (EIA) test 
waived upon presenting the equine for branding. 

(b) Buyers who purchase equine for slaughter 
shall be registered and bonded under the Packers 
and Stockyards Act. 

(c) Market or sale operators who wish to han- 
dle the sale of equme for slaughter without EIA 
testing must obtain prior approval from the State 
Veterinanan and sign an agreement to comply 
with the terms of this Rule and any specific terms 
that the State Veterinarian may direct. 

Statutory' Authority G.S. 106-405.17. 

.0413 RIGHT OF ENTRY 

The State \'eterinanan or his authorized repre- 
sentati\e shall ha\-e the authonty to: 



345 



7:4 NORTH CAROLIN.A REGISTER May 15, 1992 



PROPOSED RULES 



(1) Monitor the "check-in" personnel of the 
market or sale to see that the sellers are 
submitting the necessary equine infectious 
anemia (EIA) test charts and that they 
match the description of the equine admit- 
ted; 

(2) Review the "check-in" records to see that 
vehicle license numbers of sellers are re- 
corded; 



(3) Check for the proper placement of backtabs 
and the ^V^ branding of equine not being 
tested; 

(4) Monitor for the safe keeping of records; 

(5) Monitor to prevent unauthorized sales of 
equine that do not meet requirements on the 
premises other than through the auction; 

(6) Inspect for compliance with the rules of the 
Department of Agriculture; and 

(7) Review and make copies of all sale trans- 
actions relating to change of ownership. 

Note: Violation of these Rules is a misdemeanor 
under G.S. 106-405.19, and violators may be 
fmed, imprisoned, or both, in the discretion of 
the court. 

Statutory Authority G.S. 106-405.17. 

TITLE 10 - DEPARTMENT OF HUMAN 
RESOURCES 

lyotice is hereby given in accordance with G.S. 
I50B-2I.2 that the Division of Aging intends to 
adopt rule(s) cited as 10 NCAC 22R .0101, .0201 
- .0203. and .030/ - .0302. 

1 he proposed effective date of this action is Au- 
gust I, 1992. 

1 he public hearing will be conducted at 2:00 
p.m. on June 2, 1992 at the Division of Aging, 693 
Palmer Dr.. Room 127, Raleigh, N.C. 276/5. 

I\easons for Proposed Actions: Implementation 
of Home and Community Care Block Grant for 
Older Adults. 

y^omment Procedures: Written comments may 
be received by the Director of the DMsion of Ag- 
ing through June /5, /992. Verbal comments will 
be heard at the public hearing. 

CHAPTER 22 -AGING 

SUBCHAPTER 22R - HOME AND 

COMiVIUNITY CARE BLOCK GRANT FOR 

OLDER ADLLTS 



SECTION .0100 - ALLOCATION OF BLOCK 
GRANT FUNDS 

.0101 ALLOCATION OF BLOCK GRANT 

FUNDING THROUGH AREA AGENCIES 
ON AGING 

The Division of Aging shall annually allocate 
Block Grant funding to Area Agencies on Aging 
as specified in Subchapter 22G Rule .0906 of this 
Chapter and Chapter 1095, Section 4^ 1988 Ses- 
sion Laws. 

Statutory Authority G.S. 143B-1SI ./ (a)( / 1 ); 
/43B-IS/.l(c); 42 U.S.C. 3000 et. seg.. 

SECTION .0200 - BASIS FOR GRANTING 
BLOCK GRANT FUNDS TO COUNTIES 



.0201 DEFINITIONS 

(a) "County Block 



Grant Advisory 



Committee" means a committee, appointed an- 
nually by the Board of County Commissioners, 
that represents a broad range of agjng interest in 
the county. The committee serves to build local 
consensus for the County Funding Plan and to 
function as a resource for the County Lead 
Agency for Planning and Coordination by ob- 
taining input from service provider interests, and 
older consumers and their families. 

(b) "County Funding Plan" means the format 
developed by the Division of Aging in which 
counties identify the County Lead Agency for 
Planning and Coordination, service providers, 
services, and budgetary data for the provision of 
Home and Community Care Block Grant for 
Older Adults services in the county during the 
State Fiscal Year. 

(c) "County Lead Agency for Planning and 
Coordination" means a public or private non- 
private agency or oflice which is designated an- 
nually by the Board of County Commissioners 
for the purpose of developing the County found- 
ing Plan for the provision of scn'ices through the 
Block Grant. County Funding Plan develop- 
ment responsibiUties include directing the work 
of the County Block Grant Advisory' Committee, 
facilitating a public heanng for the County 
Funding Plan prior to approval by the Chairman 
of the Board of Commissioners, and ensuring 
that the approved County Funding Plan meets 
all requirements as specified by the Division of 
Aging prior to submission to the .Vrca Agency 
on Aging. 

Statutory Authority G.S. I43B-/H/ ./ (a)( / / ); 
/43B-/H/./(c). 

.0202 COUNTY FUNDING PLANS 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



346 



PROPOSED RULES 



(a) The County l^ad Agency for Planning and 
Coordination shall provide the County Budget 
Officer with a preliminary County Funding Plan 
which, at a minimum, specifies Home and 
Community Care Block Grant for Older Adults 
services, funding levels, and required local 
matching amounts by April 30 of each year. 

(b) Area Agencies on Aging shall grant Home 
and Community Care Block Grant for Older 
Adults funding to Counties on the basis of a 
County Funding Plan that has been approved 
by the Chairman of the Board of Commissioners 
and submitted to the Area Agency on Aging. 

(c) Ihe approved County Funding Plan shall 
be wholly a part of the Grant Agreement be- 
tween the County and the Area Agency on Aging 
for the provision of agmg ser\'ices through the 
Home and Community Care Block Grant for 
Older Adults. 

Statutory Authority G.S. I43B-181 .1 (a)( 1 1 ); 
143 B- IS 1.1(c). 

.0203 PLBLIC HEARING FOR COUNTY 
FUNDING PLAN 

(a) With the participation of the County Block 
Grant Advisory Committee, the County Lead 
Agency for Planning and Coordination shall hold 
a public hearing on the proposed County Fund- 
ing Plan prior to approval by the Chairman of 
the County Board of Commissioners. 

(b) rhe hearing shall be publicized in a man- 
ner that encourages public participation and 
comments received at the hearing will be given 
consideration in finahzing the County Funding 
Plan. 

(c) Minutes of the public hearing shall be pro- 
vided with the County Funding Plan. 

(d) The public hearing shall be conducted prior 
to June 30 of each year. 

Statutory Authority G.S. I43B-I8I .1 (a)( 1 1 ); 
143B-ISI.I(c). 

SECTION .0300 - PRIORITY FOR THE RECEIPT 
OF BLOCK GRANT SERVICES 

.0301 DEFINITIONS 

(a) "Activities of daily living" means functions 
which include: eating, dressing, bathing, 

toileting, bowel and bladder control, transfers. 



ambulation, and communication, such as speak- 
ing, the written word, signing, and communi- 
cation devices. 



(b) "Abuse" means the willful infliction of in- 
jury', unreasonable confinement, intimidation, or 
cruel punishment with resulting harm, pain, or 



mental anguish or deprivation by a caretaker of 
goods or services which are necessary to avoid 
physical harm, mental anguish, or mental illness. 

(c) "Exploitation" means the illegal or im- 
proper act or process of a caretaker using the re- 
sources of an older adult for monetary or 
personal benefit, profit, or gain. 

(d) "Instrumental activities of daily living" 
means functions which include: meal prepara- 



tion, medication intake, cleaning, money man- 
agement, phone use, laundering, reading, writing, 
shopping and going to necessary' activities. 

(e) "Neglect" means the failure to provide for 
oneself the goods or services which are necessary 
to avoid physical harm, mental anguish, or men- 
tal illness or the failure of a caretaker to provide 
such goods or services. 

Statutory Authority G.S. 143B-I81 .1 (a)( 1 1 ); 
143B-ISI.I(c). 

.0302 CLIENT PRIORITIES FOR 
RECEIPT OF SERVICES 

(a) Once service providers have determined that 
individuals meet eligibility criteria for a given 
Fiome and Community Care Block Grant for 
Older Adults service, individuals shall be served 
in the following priority order: 

( 1) Older adults for whom the need for Adult 
Protective Services has been substantiated 
by the local department of social services 
and the service is needed as part of the 
adult protective service plan. 
Older adults who are at risk of abuse, 
neglect, or exploitation. 
Older adults v\'ith extensive impairments 
in acti\'ities of daily living (ADL's), or in^ 
strumental acti\ities of daily living 



01 



(1 ADL's) 



who 



are 



at 



of 



institutionalization substitute care. 



(4) Older adults with e.xtensive ADL or L\DL 
impairments. 
Older adults with less extensive ADL or 



01 

(61 
(bl 



I A PL impairments. 
Well older adults. 



Service pro\iders must establish a process 

to screen prospective chents for the purpose of 
determining prionty for receipt of service(s) in 
accordance with the criteria specified in _10 
NCAC 22R .0302(a). 



Statutoty Authoritv G.S. I43B-ISI .1 (a)( 1 1 ); 
1 43 B- IS 1.1(c). 

TITLE 1 1 - DEPARTMENT OF 
INSURANCE 



347 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



1\ otice is hereby given in accordance with G.S. 
150B-2/.2 that the N.C. Department of Insurance 
intends to amend rule(s) cited as 1 1 NCAC 12 
.0820 - .0822, .0824, .0830. 

I he proposed effective date of this action is Au- 
gust I, 1992. 

1 he public hearing will be conducted at 10:00 
a.m. on June I, 1992 at the Dobbs Building, 3rd 
Floor Hearing Room, 430 N. Salisbury Street, 
Raleigh, N.C. 27611. 

JKeason for Proposed A ctions: Changes required 
by Federal law. 

K^omment Procedures: Written comments may 
be sent to Sue Goff Life and Health Division, 430 
N. Salisbury Street, Raleigh, N.C. 27611. Oral 
presentations may be made at the public hearing. 
Anyone having questions should call Sue Goff at 
(919) 733-5060 or Ellen K. Sprenkel at (919) 
733-4529. 

CHAPTER 12 - LIFE AND HEALTH DIVISION 

SECTION .0800 - MEDICARE SUPPLEMENT 
INSURANCE 

.0820 MINIMUM BENEFIT STANDARDS 
BEFORE JANUARY 1, 1992 

No policy or certificate may be advertised, so- 
licited or issued for delivery in this state as a 
Medicare supplement policy or certificate unless 
it meets or exceeds the following minimum 
standards. These are minimum standards and 
do not preclude the inclusion of other provisions 
or benefits which are not inconsistent with these 
standards. 
(1) General Standards. The following stand- 
ards apply to .Medicare supplement policies 
and certificates and are in addition to all 
other requirements of this regulation. 

(a) A Medicare supplement policy or certif- 
icate shall not exclude or limit benefits for 
loss incurred more than six months from 
the effective date of coverage because the 
loss involved a preexisting condition. The 
policy or certificate shall not defme a pre- 
existing condition more restrictively than 
a condition for which medical advice was 
given or treatment was recommended by 
or recei\'ed from a physician within six 
months before the effective date of cover- 
age. 

(b) A Medicare supplement policy or certif- 
icate shall not indemnify against losses 



resulting from sickness on a different basis 
than losses resulting from accidents. 

(c) A .Medicare supplement policy or certif- 
icate shall provide that benefits designed 
to cover cost sharing amounts under 
.Medicare will be changed automatically to 
coincide with any changes in the applica- 
ble Medicare deductible amount and 
copayment percentage factors. Premiums 
may be modified to correspond with such 
changes. 

(d) A "noncancellable," "guaranteed 
renewable," or "noncancellable and guar- 
anteed renewable" .Medicare supplement 
policy shall not: 

(i) provide for termination of coverage of a 
spouse solely because of the occurrence 
of an event specified for termination of 
coverage of the insured, other than the 
nonpayment of premium; or 

(ii) be cancelled or nonrenewed by the 
issuer solely on the grounds of deteri- 
oration of health. 

(e) Except as authorized by the Commissioner 
of this state, an issuer shall neither cancel 
nor fail to renew a Medicare supplement 
policy or certificate for any reason other 
than nonpayment of premium or material 
misrepresentation. 

(f) If a group Medicare supplement policy is 
terminated by the group pohcyholder and 
not replaced as provided in Subparagraph 
(l)(h) of this Rule, the issuer shall offer 
certificateholders an individual Medicare 
supplement pohcy. The issuer shall offer 
the certificateholder at least the following 
choices: 

(i) an individual Medicare supplement pol- 
icy currently offered by the issuer having 
comparable benefits to those contained in 
the terminated group Medicare supple- 
ment policy; and 

(ii) an individual Medicare supplement 
policy which provides only such benefits 
as are required to meet the minimum 
standards as defined in 11 NC.AC 12 
.0835(2). 

(g) If membership in a group is terminated, 
the issuer shall: 

(i) offer the certificateholder such conver- 
sion opportunities as are described in 
Subparagraph (l)(f) of this Rule; or 

(ii) at the option of the group polic\ holder, 
offer the certificateholder continuation of 
coverage under the group policy, 
(h) If a group Medicare supplement poUcy is 
replaced by another group Medicare sup- 
plement policy purchased by the same 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



348 



PROPOSED RULES 



policyholder, the succeeding issuer shall 
offer coverage to all persons covered un- 
der the old group policy on its date of 
termination. Coverage under the new 
group policy shall not result in any exclu- 
sion for preexisting conditions that would 
have been covered under the group pohcy 
being replaced, 
(i) Termination of a Medicare supplement 
pohcy or certificate shall be without prej- 
udice to any continuous loss which com- 
menced while the pohcy was in force, but 
the extension of benefits beyond the pe- 
riod during which the pohcy was in force 
may be predicated upon the continuous 
total disability of the insured, limited to 
the duration of the pohcy benefit period, 
if any, or to payment of the maximum 
benefits. 
(2) Minimum Benefit Standards. 

(a) Coverage of Part A Medicare ehgible ex- 
penses for hospitalization to the extent 
not covered by Medicare from the 61st 
day through the 90th day in any Medicare 
benefit period; 

(b) Coverage for either aJl or none of the 
Medicare Part A inpatient hospital 
deductible amount; 

(c) Coverage of Part A Medicare ehgible ex- 
penses incurred as daily hospital charges 
during use of Medicare's lifetime hospital 
inpatient reserve days; 

(d) Upon e.xhaustion of all Medicare hospital 
inpatient coverage including the lifetime 
reserve days, coverage of 90 percent of all 
Medicare Part A ehgible expenses for 
hospitalization not covered by Medicare 
subject to a lifetime maximum benefit of 
an additional 365 days; 

(e) Coverage under Medicare Part A for the 
reasonable cost of the first three pints of 
blood (or equivalent quantities of packed 
red blood cells, as defmed under federal 
regulations) unless replaced in accordance 
with federal regulations or already paid for 
under Part B; 

(f) Co\erage for the coinsurance amount of 
Medicare ehgible e.xpenses under Part B 
regardless of hospital confmement, subject 
to a maximum calendar year out-of- 
pocket amount equal to the Medicare Part 
B deductible [one hundred dollars 
($100.00)]. Effective Januar,- 1, 1990, 
coverage for the coinsurance amount (20 
percent) of Medicare ehgible expenses for 
covered outpatient drugs used in 
immunosuppressive therapy subject to the 



Medicare deductible amount is included 
within this provision; 
(g) Effective January 1, 1990, coverage under 
Medicare Part B for the reasonable cost 
of the first three pints of blood (or equiv- 
alent quantities of packed red blood cells, 
as defmed under federal regulations), un- 
less replaced in accordance with federal 
regulations or already paid for under Part 
A, subject to the \ledicare deductible 
amount. 

Statutory Authority G.S. 58-2-40; 58-54-10; 
58-54-15. 

.0821 STANDARDS FOR CLAIMS PAYMENT 

(a) An issuer shall comply with Section 
1882(c)(3) of the Social Security Act [as enacted 
by Section 4081(b)(2)(C) of the Omnibus Budget 
Reconcihation Act of 1987 (OBRA 1987), P.L. 
100-203] by: 

( 1 ) Accepting a notice from a Medicare carrier 
on dually assigned claims submitted by 
participating physicians and supphers as a 
claim for benefits in place of any other 
claim form otherwise required and making 
a payment determination on the basis of 
the information contained in that notice; 

(2) Notifying the participating physician or 
suppher and the beneficiary of the pay- 
ment determination; 

(3) Paying the participating physician or sup- 
pher directly; 

(4) Furnishing, at the time of enrollment, each 
enrollee with a card Usting the pohcy 
name, number and a central mailing ad- 
dress to which notices from a Medicare 
carrier may be sent; 

(5) Paying user fees for claim notices that are 
transmitted electronically or otherwise; 
and 

(6) Providing to the Secretary of Health and 
Human Services, at least annually, a cen- 
tral mailing address to which all claims 
may be sent by .Medicare carriers. 

(b) Comphance with the requirements set forth 
in Paragraph (a) of this Rule shall be certified on 
the Medicare supplement insurance experience 
reporting form on page 47 of the Annual State- 
ment. 

Statutory Authority G.S. 58-2-40; 58-54-/5. 

.0822 LOSS R.ATIO STANDARDS AND 

REFLND OR CREDIT OF PREMIL.M 

(a) Loss Ratio Standards: 
(1) A .Medicare supplement pohcy form or 
certificate form shall not be dehvered or 



349 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



issued for delivery unless the policy form 
or certificate form can be expected, as es- 
timated for the entire period for which 
rates are computed to provide coverage, 
to return to policyholders and certificate 
holders in the form of aggregate benefits 
(not including anticipated refunds or 
credits) provided under the policy form 
or certificate form: 

(A) At least 75 percent of the aggregate 
amount of premiums earned in the case 
of group policies, or 

(B) At least 65 percent of the aggregate 
amount of premiums earned in the case 
of individual policies, 

calculated on the basis of incurred claims 
experience, or incurred health care ex- 
penses where coverage is provided by a 
health maintenance organization on a 
service rather than reimbursement basis, 
and earned premiums for such period and 
in accordance with accepted actuarial 
principles and practices. 

(2) All filings of rates and rating schedules 
shall demonstrate that expected claims in 
relation to premiums comply with the re- 
quirements of this Section when com- 
bined with actual experience to date. 
Filings of rate revisions shall also demon- 
strate that the anticipated loss ratio over 
the entire future period for which the re- 
vised rates are computed to pro%'ide cov- 
erage can be expected to meet the 
appropriate loss ratio standards. 

(3) For the purposes of Subparagraph (a)(1) 
of this Rule, group pohcies sold or solic- 
ited on an individual basis by mail or mass 
media advertising shall be considered to 
be group policies. 

(b) Refund or Credit Calculation: 
(1) An issuer shall collect and file with the 
Commissioner by May 3 1 of each year the 
data contained in the reporting form for 
each type in a standard \ledicare supple- 
ment benefit plan. This information shall 
be fded with the Life and Health Division. 
The reporting form shall be in the format 
prescribed by the NAIC in Appendix A 
of the .Model Regulation to Implement 
the NAIC Medicare Supplement Insur- 
ance Minimum Standards Model Act, as 
adopted July 30, 1991, including any sub- 
sequent amendments and editions. A 
copy of this format is on fde at the North 
Carolina Department of Insurance. 
Copies may be obtained from the De- 
partment at a cost of two dollars and fifty 
cents ($2.50) each. 



(2) If on the basis of the experience as re- 
ported the benchmark ratio since incep- 
tion (ratio 1) exceeds the adjusted 
experience ratio since inception (ratio 3), 
then a refund or credit calculation is re- 
quired. The refund calculation shall be 
done on a statewide basis for each type in 
a standard Medicare supplement benefit 
plan. For purposes of the refund or credit 
calculation, experience on pohcies issued 
within the reporting year shall be ex- 
cluded. 

(3) A refund or credit shall be made only 
when the benchmark loss ratio exceeds 
the adjusted experience loss ratio and the 
amount to be refunded or credited exceeds 
a de minimis level. Such refund shall in- 
clude interest from the end of the calendar 
year to the date of the refund or credit at 
a rate specified by the Secretary of Health 
and Human Services, but in no event shall 
it be less than the average rate of interest 
for 13- week Treasury notes. A refund or 
credit against premiums due shall be made 
by September 30 following the experience 
year up>on which the refund or credit is 
based. 

(c) Annual Filing of Premium Rates. An 
issuer of Medicare supplement policies and cer- 
tificates issued in this state shall file annually its 
rates, rating schedule and supporting documen- 
tation, including ratios of incurred losses to 
earned premiums by policy duration, for ap- 
proval by the Commissioner in accordance with 
the filing requirements and procedures prescribed 
by statute or rule. The supporting documenta- 
tion shall also demonstrate in accordance with 
actuarial standards of practice using reasonable 
assumptions that the appropriate loss ratio 
standards can be expected to be met over the 
entire period for which rates are computed. Such 
demonstration shall exclude active life reserves. 
An expected third-year loss ratio that is greater 
than or equal to the appHcable percentage shall 
be demonstrated for pohcies or certificates in 
force less than three years. As soon as practica- 
ble, but prior to the effective date of enhance- 
ments in Medicare benefits, every issuer of 
Medicare supplement pohcies or certificates in 
this state shall tile with the Commissioner, in 
accordance with the apphcable filing procedures 
of this state: 

(1) Appropriate premium adjustments neces- 
sar>' to produce loss ratios as anticipated 
for the current premium for the apphcable 
policies or certificates. Such supporting 
documents as necessary to justify the ad- 
justment shall accompany the filing. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



350 



PROPOSED RULES 



(A) An issuer shall make such premium 
adjustments as are necessary to produce 
an expected loss ratio under such policy 
or certificate that wUl conform with mini- 
mum loss ratio standards for Medicare 
supplement policies, and which are ex- 
pected to result in a loss ratio at least as 
great as that originally anticipated in the 
rates used to produce current premiums 
by the issuer for such Medicare supple- 
ment policies or certificates. No premium 
adjustment which would modify the loss 
ratio experience under the pxjlicy other 
than the adjustments descnbed herein 
should be made with respect to a policy 
at any time other than upon its renewal 
date or aimiversarv' date. 

(B) If an issuer fails to make premium ad- 
justments acceptable to the Commis- 
sioner, the Commissioner may order 
premium adjustments, refunds, or pre- 
mium credits deemed necessary to achieve 
the loss ratio required by this Rule. 

(2) Any appropriate riders, endorsements or 
policy forms needed to accomplish the 
Medicare supplement policy or certificate 
modifications necessary to eliminate ben- 
efit duplications with Medicare. Such 
riders, endorsements or policy forms shall 
provide a clear description of the Medi- 
care supplement benefits provided by the 
policy or certificate, 
(d) Public Hearings. The Commissioner may 
conduct a public hearing to gather information 
concerning a request by an issuer for an increase 
in a rate for a policy form or certificate form, if 
the experience of the form for the previous re- 
porting period is not in compliance with the ap- 
plicable loss ratio standard. The determination 
of comphance is made without consideration of 
any refund or credit for such reporting period. 
Public notice of such hearmg shall be furnished 
in the manner prescribed by statute. 

Statutofj Authority G.S. 58-2-40: 5S-54-20. 

.0824 RFQl IRED DISCLOSURE PROVISIONS 

(a) General Rules. 
(1) Medicare supplement policies and certif- 
icates shall include a renewal or continua- 
tion provision. The language or 
specifications of such provisions must be 
consistent with the type of contract issued. 
Such provision shall be appropriately 
captioned and shall appear on the first 
page of the policy, and shall include any 
reser\ation by the issuer of the right to 
change premiums and any automatic re- 



newal premium increases based on the 
policyholder's age. 

(2) E.xcept for riders or endorsements by 
which the issuer effectuates a request 
made in writing by the insured, exercises 
a specifically reser\'ed right under a Medi- 
care supplement policy, or is required to 
reduce or eliminate benefits to avoid du- 
phcation of Medicare benefits, all riders 
or endorsements added to a Medicare 
supplement policy after date of issue or 
at reinstatement or renewal which reduce 
or eliminate benefits or coverage in the 
policy shall require a signed acceptance 
by the insured. After the date of poficy 
or certificate issue, any rider or endorse- 
ment which increases benefits or coverage 
with a concomitant increase in premium 
during the poficy term shall be agreed to 
m writing signed by the insured, unless the 
benefits are required by the minimum 
standards for Medicare supplement poli- 
cies, or if the increased coverage is re- 
quired by law. Where a separate 
additional premium is charged for benefits 
provided in connection with riders or 
endorsements, such premium charge shall 
be set forth in the poficy, 

(3) Medicare supplement poficies or certif- 
icates shall not provide for the payment 
of benefits based on standards described 
as "usual and customarv'," "reasonable 
and customary" or words of similar im- 
port. 

(4) If a Medicare supplement poficy or certif- 
icate contains any limitations with respect 
to preexisting conditions, such limitations 
shall appear as a separate paragraph of the 
policy and be labeled as "Preexisting 
Condition Limitations". 

(5) Medicare supplement poficies and certif- 
icates shall have a notice prominently 
printed on the first page of the poficy or 
certiticate or attached thereto stating in 
substance that the poficyholder or 
certilicatcholder shall have the right to re- 
turn the poficy or certificate within 30 
days of its defi\ery and to have the pre- 
mium refunded if, after examination of the 
poficy or certificate, the insured person is 
not satisfied for any reason. 

(6) Issuers of accident and health policies or 
certificates which provide hospital or 
medical expense coverage on an expense 
incurred or indemnity basis, other than 
incidentaUy, to persons eUgible for Medi- 
care by reason of age shall pro\ ide to such 
appficants a copy of the Medicare Sup- 



351 



NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



plement Buyer's Guide in the form devel- 
oped jointly by the National Association 
of Insurance Commissioners and the 
Health Care Financing Administration in 
a type size no smaller than 12-point type. 
Delivery of the Buyer's Guide shall be 
made whether or not such policies or cer- 
tificates are advertised, solicited or issued 
as Medicare supplement policies or certif- 
icates as defined in this Rule. E.xcept in 
the case of direct response issuers, delivery 
of the Buyer's Guide shall be made to the 
applicant at the time of apphcation and 
acknowledgement of receipt of the Buyer's 
Guide shall be obtained by the issuer. 
Direct response issuers shaU deliver the 
Buyer's Guide to the applicant upon re- 
quest but not later than at the time the 
pobcy is delivered. 

(b) Notice Requirements. 

(1) As soon as practicable, but no later than 
30 days prior to the annual effective date 
of any Medicare benefit changes, an issuer 
shall notify its policyholders and certif- 
icate holders of modifications it has made 
to Medicare supplement policies or certif- 
icates in a format acceptable to the Com- 
missioner. Such notice shall: 

(A) Include a description of revisions to the 
Medicare program and a description of 
each modification made to the coverage 
provided under the Medicare supplement 
pobcy or certificate, and 

(B) Inform each policyholder or 
certificateholder as to when any premium 
adjustment is to be made due to changes 
in Medicare. 

(2) The notice of benefit modifications and 
any premium adjustments shall be in 
outline form and in clear and simple terms 
so as to facihtate comprehension. 

(3) Such notices shall not contain or be ac- 
companied by any solicitation. 

(c) Outline of coverage requirements for Med- 
icare supplement policies. 

(1) Issuers shall provide an outline of coverage 
to each applicant at the time application 
is presented to the prospective applicant 
and, except for direct response policies, 
shall obtain an acknowledgement of re- 
ceipt of such outline from the applicant; 
and 

(2) If an outline of coverage is provided at the 
time of application and the Medicare 
supplement policy or certificate is issued 
on a basis which would require revision 
of the outline, a substitute outUne of cov- 
erage properly describing the policy or 



certificate shall accompany such policy or 
certificate when it is delivered and contain 
the following statement, in no less than 
12 point type, immediately above the 
company name: 

"NOTICE: Read this outline of coverage 
carefully. It is not identical to the outline 
of coverage provided upon application 
and the coverage originally appbed for has 
not been issued." 

(3) The outline of coverage provided to ap- 
pbcants pursuant to this Rule consists of 
four parts: a cover page, premium infor- 
mation, disclosure pages, and charts dis- 
playing the features of each benefit plan 
offered by the issuer. The outline of cov- 
erage shall be in the language and format 
prescribed in Subparagraph (c)(4) of this 
Rule in no less than l2-point type. All 
plans A-J shall be shown on the cover 
page, and the plan or plans offered by the 
issuer shall be prominently identified. 
Premium information for the plan or 
plans offered shall be shown on the cover 
page or immediately following the cover 
page and shall be prominently displayed. 
The premium and mode shall be stated for 
each plan that is offered to the prospective 
appbcant. All possible premiums for the 
prospective appbcant shaO be illustrated. 

(4) The outline of coverage shall be in the 
language and format as prescribed by the 
NAIC in Section 16C(4) of the Model 
Regulation to Implement the NAIC 
Medicare Supplement Insurance Mini- 
mum Standards Model Act, as adopted 
July 30, 1991, including any subsequent 
amendments and editions. A copy of this 
format is on file with the North Carolina 
Department of Insurance. Copies may 
be obtained at a cost of fourteen doUars 
($14.00) each from the Life and Health 
Division, 430 N. Sabsbury Street, Raleigh, 
North Carolina 2761 1. 

(d) Notice regarding pobcies or certificates 
which are not Medicare supplement policies. 
Any accident and health insurance pobcy or cer- 
tificate, other than a Medicare supplement pol- 
icy; or a pobcy issued pursuant to a contract 
under section 1876 or section 1 833 of the Federal 
Social Security Act (42 U.S.C. 1395 et.seq.), dis- 
abibty income pobcy; basic, catastrophic, or ma- 
jor medical expense pobcy; single premium 
nonrenewable policy or other pobcy identified in 
44 NCiVC 14 .0816(2), n_ NCAC 12 .08 16(b), 
issued for debvery in this state to persons ebgible 
for Medicare by reason of age shall notify in- 
sureds under the pobcy that the pobcy is not a 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



352 



PROPOSED RULES 



Medicare supplement policy or certificate. Such 
notice shall either be printed or attached to the 
first page of the outline of coverage delivered to 
insureds under the policy, or if no outline of 
coverage is delivered, to the fu^st page of the pol- 
icy or certificate delivered to insureds. Such no- 
tice shall be in no less than 12 point type and 
shall contain the following laneuaae: 
"THIS [POLICY OR CERTIF fCATEl IS NOT A 
MEDICARE SUPPLEMENT (POLICY OR 
CERTIFICATE). If you are eligible for Medicare, 
review the \ledicare Supplement Buyer's Guide 
available from the company." 

Statutory Authority G.S. 58-2-40; 58-54-25. 

.0830 PROHIBITIONS IN REPLACEMENT 
POLICIES OR CERT1FIC,\TES 

(a) If a .Medicare supplement policy or certif- 
icate replaces another NIedicare supplement pol- 
icy or certificate, the replacing issuer shall waive 
any time periods applicable to preexisting condi- 
tions, waiting periods, elimination periods and 
probationary' periods in the new Medicare sup- 
plement policy or certificate to the extent such 
time was spent under the onginal policy. 

(b) If a .Medicare supplement policy or certif- 
icate replaces another NIedicare supplement pol- 
icy or certificate that has been in effect for at least 
six months, the replacing policy shall not provide 
any time period applicable to pre-existing condi- 
tions, waiting periods, elimination periods, or 
probationary periods. 

(c) A separate charge may not be made to the 
applicant for the waiver of the pre-existing con- 
dition or other waiting period in a replacement 
poUcy. 

Statutory Authority G.S. 58-2-40. 

TITLE 12 - DEPARTMENT OF .JUSTICE 



No 



otice is hereby given in accordance with G.S. 
1 50B-2I .2 that the General Statutes Commission 
intends to amend rulefsi cited as 12 \CAC 8 
.0/03. .0/04. and .0/05: adopt rule(s) cited as / 2 
SCAC 8 .0/09, .0204 and .0506. 

1 he proposed effecti\-e date of this action is Au- 
gust 3. /992. 

1 nstmction on how to demand a public hearing: 
A request for a public hearing must be in writing 
and must be submitted to Floyd Le\\is. Re\-isor of 
Statutes, P.O. Box 629, Raleigh, \orth Carolina 
2^602-0629 by June /. /992. 



IXeason for Proposed Action: It is necessary to 
revise existing rules on meetings, procedures and 
records to reflect changed needs and practices, 
update methods, and eliminate unnecessary mate- 
rial. It is necessary to adopt new rules to inform 
the public of the Commission's policies respecting 
drafting committees and its requirements for pe- 
titions for rule making and declaratory judgments. 

C_ omment Procedures: The record of consider- 
ation will be open for receipt of written comments 
from May 15, 1992 through June /5, 1992. Such 
comments must be mailed to Floyd Lewis, Revisor 
of Statutes, P.O. Box 629, Raleigh, Sorth 
Carolina 2^602-0629. 

CHAPTER 8 - GENERAL STATUTES 
COMMISSION 

SECTION .0100 - RULES OF ORG.\NIZATION 

.0103 MEETINGS 

(a) Regular .Meetings. ^Hi# oommiooion holds 
Het- k?^^ than t^^e rogular mcotingii each year, ef 
which eft« » hold » Jun e aft4 ©*w m Ndombor. 
S*e rogular Jun e aft4 Ncombor mL ' ctingc . ©f tfee 
commission are h#ki ift Rabigh. tnrt ih^ com 
mii .' jion »**¥ prc i ido fof A* holdmg ef othor 
mootingo from time te timo at- aftv othor placo Bf 
placoo ift th<* otato. Rogular mootingo »f A© 
Gonoral Statutoo Commiooion oh all b^ hel4 at 
10:00 arffir tft ihe i\ttomoy Gonoralo Office at 
R.aloigh ©» tfee ft^t- Friday »f e ach month. 
Wli e nover th*» businooo Bi ihr^ commission Fe- 
quiros. ttw commission shall rocoso &» Friday aed 
continu e it* mooting »» Saturday morning fol- 
lowing. Bw chainnan &f tl*e CQinmission i^ a«- 
thorued te- postpone e* othon' i iso ¥afv tfe* tafte 
©f tbe mooting ' ■ vhono' i or unusual circumstanc e s 
mako it e xp e di e nt »f dosirublo. 1 he commission 
shall hold regular meetings on the tlrst Friday of 
each month except Juh' and .Autmst. unless the 
commission decides at one meeting to select a 
ditTerent date for the next regular meeting. In 
addition, the chairman i^ authonzed. consistent 
with G.S. 164-15. to postpone, eliminate, or 
otherwise \arv the date of a meeting whenever 
circum>tances make it expedient or desirable. 
The secretary' or his designee shall arrange the 
place for each meetmg and shall not if \- members 
of the commission bv mail or bv telephone ot the 
time, location, and date of each meetmg. 

(b) Special Meetings. Special meetings may 
be called by the chairman or by any two mem- 
bers of the commission. Notice of any special 
meeting of the commission shall be given to the 
members of the commission bv letter mailed or 



353 



~:4 NORTH CAROLL\A REGISTER May 15, 1992 



PROPOSED RULES 



by telephone not less than -W day§ boforo tb» 
date fix e d thorofor 48 hours before the scheduled 
meeting time and shall state the date, hour, and 
place of the meeting. Attendance at a meeting 
without objection waives any right to object to 
lack of proper notice. Such Notice shall be 
mailed given by the secretary, except that if the 
position of secretary is vacant the notices notice 
may be mailed given by the person or persons 
calling the meeting. AH opocial meetings shali 
be heM- \r Raleigh, unless the commission shall 
provide fof a different place fof afiv particular 
mooting. At any sjjecial meeting any business 
may be transacted that might be transacted at a 
regular meeting except the election of officers of 
the commission. 

(c) Quorum. A majority »f the mombors shall 
constitut e a quorum. If a quorum shaB foil fails 
to attend any regular meeting of the commission, 
the members present at the time and place fixed 
for s«eh regular the meeting may adjourn the 
meeting to another time, and such notic e »f the 
adjourned meeting shall be given t© aH mombero 
ef the oommiooion as is required with roopoct t© 
opocial moetingo, oxcopt that if the position ef 
oooretary is saoant such notic e may be given hf 
the mombors present fef the mooting which is se 
adjourned. The secretary or other person desig- 
nated at the meeting shall notify the members 
who were not present of the new time and place. 

(4) Open Meetings. .Meetings ef the commis 

(e) Order »f Business. The order »f business 
ef the commission shaH be as stated » the 
agenda, subject te- the v«4e ef the commission 
%f the direction e4^ the chairman. 

Statutory Authority G.S. 164-15. 

.0104 PROCEDLRES 

(a) Sources. The commission may act on 
suggestions from any source in regard to any of 
its duties. 

(b) Research, Dral'ting. In addition to its own 
efforts the commission may utilize any of the 
following or a combination thereof for its re- 
search and drafting: 

(1) the revisor, or 

(2) a drafting committee appointed from 
members or He» members nonmembers 
or both, ¥rhe shall recoivo aft appropriate 
honorarium, or 

(3) an individual or individuals appointed for 
a specific project, whe are te be appro 
pnately componsatod. 

With the approval of the commission a request 
may be made to other individuals or groups for 



their comments in regard to a draft or the re- 
vision in general. 

(c) Review, Adoption. The commission shall 
conduct a line by line review of any proposal it 
recommends to the General Assembly for 
adoption. 

(d) Memorandum of Law. Except in an unu- 
sual circumstance each proposal recommended 
to the General Assembly shall be accompanied 
by a memorandum of law. 

fe) Introduction. The proposals rocommondod 
tB the G e n e ral Assembly wili normally be intro 
duced by a logislativo member ef mombors ef the 
commiooion. 

Statutory Authority G.S. 164-13; 164-17. 

.0105 RECORDS 

(a^ Maintenance, Custody. The revisor shall 
keep and maintain the records of the commis- 
sion. Copies »f e ach proposal r e conunonded te 
the General Ass e mbly as well as the accompa 
nying memorandum ef law shall be supphod 
upon roquost te^ afty indi^ i idual, provided that- 
The commission may require reimbursement for 
copying and mailing expenses. 

fb^ Aocoss. Access t© the records ef the Gon 
efal Statutes Commission shall be as provided ia 

Statutory Authority G.S. 164-17. 

.0109 DRAFTING COMMITTEES 

(a) Each drafting committee shall comply with 
the provisions of G.S. 143-318.10 and 
143-318.11. 

(b) The revisor or his designee shaU serve, ex 
officio, as a member of each drafting committee. 

Statutory Authority G.S. 164-13: 164-17. 
SECTION .0200 - PETITIONS FOR RLLES 

.0204 PETITIONS FOR RLLEM.AKING 

(a) Any person may petition the commission 
to adopt a new rule or to amend or repeal an 
existing rule by sending a wntten petition for 
rulemaking to the commission at the commis- 
sion's mailing address. The petition must he 
entitled "Petition for Rulemaking" and must in- 
clude the foUowing information: 

( 1 ) the name and address of the person sub- 
mitting the petition: 

(2) a citation to any rule for which an 
amendment or repeal is requested; 

(3) a draft of any proposed new rule or 
amended rule; 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



354 



PROPOSED RULES 



(4) an explanation for the request, with any 
supporting information the petitioner be- 
lieves IS rele\'ant and wishes the commis- 
sion to consider; and 

(5) an identil'ication of the persons or class of 
persons most likely to be atTected by the 
proposed action. 

(b) The commission shall decide whether to 
grant or deny the petition and may request addi- 
tional information. When the commission de- 
nies a petition, the notice of denial shall state the 
reason. 

Statiaoiy Authority G.S. 164-17; I50B-20. 

SECTION .0500 - DECI .\R.\TORY RLLINGS 

.0506 DECL.AR.\TORV RLLINGS 

(a) .'Ml petitions for declaratory rulings shall be 
in wnting and shall be sent to the commission 
at its mailing address. Each petition shall be en- 
titled "Petition for Declaratory Ruling" and shall 
include the following information: 



( 1) the name and address of the petitioner; 

(2) the statute or rule to which the petition 
relates; 

(3) a concise statement of the manner in 
which the petitioner has been or will be 
injured or adversely affected bv the statute 
or rule; 

(4) if the petitioner wishes to make an oral 
presentation to the commission on the 
petition, a statement clearly requesting an 
opportunity to appear and be heard. 

(b) The commission may refuse to issue a 
declarator\" ruling when: 

( 1 ) the petition does not comply with this 
Rule; 

(2) the commission has previously issued a 
declaratory ruling on substantially similar 
facts; 

the conimission has previously issued a 
tinal agencv decision in a contested case 
on substantially similar facts; 



ih 



lii 



the facts underKing the request for a 
declarator\' rulmg were specilically con- 
sidered at the time the rule vs'as adopted: 

(5) the subject matter of the petition is in- 
vohed in pending litigation; 

(6) the commission determines for good cause 
not listed in this Paragraph that issuance 
of a declarator^' ruling is undesirable. 

Statutoiy Authority G.S. 164-17; I50B-4. 

TITLE 21 - OCCUP.4TIO\.\L LICENSING 
BOARDS 



lyotice is hereby given in accordance with G.S. 
I50B-2I.2 that the N.C. State Board of Certified 
Public Accountant Examiners intends to amend 
rule(s) cited as 21 NCAC 8A .0301; 80 .0101 - 
.0102, .0205, .0302; 8H .0001. 

1 he proposed effective date of this action is 
September 1, 1992. 

1 he public hearing will be conducted at 10:00 
a.m. on June 22, 1992 at the McKimmon Center, 
Corner of Western Blvd. and Gorman St., 
Raleigh, N.C. 

IKeason for Proposed Actions: Petition to the 
Board by a NC CPA to hold a rule-making hear- 
ing and administrative amendments proposed by 
the Board. 

K^omment Procedures: Anyone wishing to ap- 
pear at the hearing should notify the Board's re- 
ceptionist no later than Friday, June 5, 1992. In 
order to ensure that all those interested in the rules 
are allowed to participate in the discussion, callers 
will be asked to indicate whether they wish to 
speak at the hearing and, if so, whether they will 
speak in favor of the amendments or against them. 
A II speakers will be limited to a total of ten min- 
utes. Board members will also review written 
comments received at the Board office at 1 101 
Oberlin Road. Ste. 104, Raleigh, NC, by Friday, 
June 5, 1992. 

CHAPTER 8 - BOARD OF CERTIFIED PLBLIC 
ACCOLNT.\NT EXAMINERS 

SLBCIIAPTER 8A - DEPARTMENTAL RLLES 

SECTION .0300 - DEFINITIONS 

.0301 DEFINITIONS 

(a) The definitions set out in G.S. 93- 1(a) shall 
apply when those defmed terms are used in 21 
NCAC 8. 

(b) In addition to the definitions set out in G.S. 
93- 1(a), the foOowing defmitions and other defi- 
nitions in this Section apply when these terms are 
used in 21 NCAC 8: 

(1) "Active," when used to refer to the status 
of a person, describes a person who pos- 
sesses a North Carolina certificate of 
qualification and who has not otherwise 
been granted "Retired," "Inactive," or 
"Conditional" status; 

(2) "AICPA" means the .\merican Institute 
of Certified Public Accountants; 



355 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



(3) "Applicant" means a person who has 
applied to take the CPA examination; 

(4) "Attest service" means providing: 

(A) any audit, 

(B) any review of a financial statement, 

(C) any compilation of a fmancial state- 
ment when the CPA expects, or reason- 
ably might expect, that a third party wUl 
use the compilation and the CPA does 
not disclose a lack of independence, and 

(D) any examination of prospective fman- 
cial information; 

(5) "Audit" means an examination of fman- 
cial statements of a person by a CPA, 
conducted in accordance with generally 
accepted auditing standards, to determine 
whether, in the CPA's opinion, the state- 
ments conform with generally accepted 
accounting principles or, if applicable, 
with another comprehensive basis of ac- 
counting; 

(6) (4^ "Board" means the North Carolina 
State Board of Certified Public Account- 
ant Examiners; 

(7) f^ "Calendar year" means the 12 months 
beginning January 1 and ending Decem- 
ber 31; 

(8) (4^ "Candidate" means a person whose 
application to take the CPA examination 
has been accepted and who may sit for the 
CPA examination; 

(9) "Commission" means compensation, ex- 
cept for a referral fee, for recommending 
or referring any product or service to be 
supplied by another person; 

"Compilation of a tinancial statement" 
means presenting in the form of a finan- 
cial statement mformation that is the rep- 



resentation of any other person without 
the CPA's undertaking to express any as- 
surance on the statement; 



(1 1) {p^ "Conditional," when used to refer to 
the status of a person, describes a person 
who holds a North Carolina certificate of 
qualification under certain conditions as 
imposed by the Board, such as additional 
requirements for failure to complete the 
required CPE hours in a calendar year; 

(12) "Contingent fee" means a fee estahhshed 
for the performance of any service pursu- 
ant to an arrangement in which no fee will 
be charged unless a specified finding or 
result is attained, or in which the amount 
of the fee is otherwise dependent upon the 
finding or result of such service; 



(14) (^ "CPE" means continuing professional 
education; 

(15) "Disciphnary action" means revocation 
or suspension of, or refusal to grant, 
membership, or the imposition of a 
reprimand, probation, constructive com- 
ment, or any other penalty or condition; 

(16) "Examination of prospective fmancial 
information" means an evaluation by a 
CPA of: 

(A) a forecast or projection, 

(B) the support underlying the assumptions 
in the forecast or projection, 

(C) whether the presentation of the forecast 
or projection is in conformity with 
AICPA presentation guidelines, and 

(D) whether the assumptions in the forecast 
or projection provide a reasonable basis 
for the forecast or projection; 

(17) f+ft^ "FASB" means the Financial Ac- 
counting Standards Board; 

(18) f4-l-} "Firm" means an individual proprie- 
tor, a partnership or a professional cor- 
poration; 

19) "Forecast" means prospective financial 



(13) (*> "CPA' 
countant; 



means certilied pubUc ac- 



statements that present, to the best of the 
responsible party's knowledge and beUef, 
an entity's expected financial position, re- 
sults of operations, and changes in finan- 
cial position or cash flows that are based 
on the responsible party's assumptions 
reflecting conditions it expects to exist and 
the course of action it expects to take; 

(20) f+5) "GASB" means the Goverrunental 
Accounting Standards Board; 

(21) f44) "Inactive," when used to refer to the 
status of a person, describes one who has 
voluntarily surrendered a certificate of 
qualification and who does not use the ti- 
tle "certified pubUc accountant" nor does 
he allow anyone to refer to him as a 
"certified pubUc accountant", and neither 
he nor anyone else refers to him in any 
representation as described in 21 NCAC 
8A .0308(b). Unrevoked inactive certif- 
icates shall be kept by the Board until 
change of status of the former certificate 
holder; 

(22) (44^ "IRS" means the Internal Revenue 
Service; 

(23) f44) "License year" means the 12 months 
beginning July 1 and ending June 30; 

(24) irWf ".Member of a firm" means any CPA 
who has an ownership interest in a CPA 
firm including owners, partners and 
shareholders; 

(25) k\^ "NASBA" means the National As- 
sociation of State Boards of Accountancy; 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



356 



PROPOSED RULES 



(26) fW^ "NCACPA" means the North 
Carolina Association of Certified Public 
Accountants; 

(27) f4-9) "North Carolina office" means any 
office physically located in North 
Carolina; 

(28) f3% "Participating firm" means a firm 
participating in the SQR program. Does 
not include firms exempt by reason of 21 
NCAC 8M .0102(a) or deemed in com- 
pliance pursuant to 21 NCAC 8.M .0104; 

(29) "Person" means any natural person, 
corporation, partnership, unincorporated 
association, or other entity; 

(30) "Projection" means prospective fmancial 
statements that present, to the best of the 
responsible party's knowledge and belief, 
gven one or more hypothetical assump- 
tions, an entity's expected linancial posi- 
tion, results of operations, and changes in 
fmancial position or cash flows that are 
based on the responsible part\ s assump- 
tions reflecting conditions U exixcts 
would e.xist and the course of action h 
expects would be taken given such hy- 
pothetical assumptions; 

(31) "Referral fee" means compensation for 
recommending or referring any service of 
a CPA to any person; 

(32) f^-H "Retired," when used to refer to the 
status of a person, describes one possess- 
ing a North Carolina certificate of quali- 
fication who does not receive any earned 
compensation for current personal ser- 
vices in any job whatsoever; however, this 
does not preclude volunteer services for 
which the retired CPA receives no direct 
nor indirect compensation so long as the 
retired CP/\ does not sign any documents, 
related to such services, as a CPA. Lim- 
ited exemptions may be granted in the 
discretion of the Board only in thooo ifi- 
f . tancL'c . wIk ' u ttft applicant fo* 'rc'tir( .* d" 
iUatufl r . how ' .' i t+k» p i^ f t onal s e p i io t*' : . a«* Hn- 
rL'latod to t+M» l+i44 &f accounting aR4 tlw 
applicant st. ' nfi e c i He- intent to rotum to 
ucti' i o f i tatuo; afi4 the following instances 
when the applicant \enfies no intent to 
return to active status and either: 

(A) the applicant performs no personal 
services related to the field of accounting. 
or 

(B) the applicant is not pro\iding account- 
ing services, is 70 \ears of age or more, 
and agrees not to hold himself out as a 
C P.\ or use the title in connection with 
any t^•pe of service provided to the public. 



(33) f55^ "Revenue Department" means the 
North Carolina Department of Revenue. 

(34) "Review" means to perform an inquiry 
and analylical procedures that permit a 
CPA to determine whether there is a rea- 
sonable basis for expressing limited assur- 
ance that there are no material 
modifications that should be made to h- 
nancial statements in order for them to 
be in conformity with generally accepted 
accounting principles or, if applicable, 
with another comprehensive basis of ac- 
counting; 

(35) (-3^ "SQR Advisory Committee" means 
the State Quahty Review Advisory Com- 
mittee to the Board; afi4 

(36) {¥1^ "SQR Program" means the State 
Quality Review Program of the North 
Carolina State Board of Certified Public 
Accountant Examiners; 

(37) f5^ "Roviow t^am^ "SQR Review 
team" means that team of CPAs which 
reviev\s a firm pursuant to the require- 
ments of Subchapter 8M. A review team 
may be comprised of one or more mem- 
bers; 

(38) f34i "Review te»f» captain" "SQR Re- 
view team captain" means that member 
of a review team who is responsible for 
the review and supervi 

(39) f^ "Roviovvor" "SQR Reviewer" means 
a member of a review team including the 
review team captain; and 

(40) "Trade name" means a name used to 
designate a business enterprise. 

Stalutoty Authority G.S. 93-1; 93-1 2( 8c). 

SLBCIIAPTER 8G - PROFESSIONAL ETHICS 
AND CONDLCT 

SECTION .0100 - GENERAL PROVISIONS 

.0101 COMPLIANCE Willi BOARD RLLES 

OF PROFESSIONAL ETHICS/CONDLCT 

(a) The reUance of the public and the business 
community on sound financial reporting and ad- 
vice on business affairs imposes on the account- 
ing profession an obligation to maintain liigh 
standards of technical competence, morality and 
integrity. To this end, a CPA shall at all times 
maintain independence of thought and action, 
hold the affairs of his clients in strict confidence, 
strive continuously to impro\e his professional 
skills, observe generally accepted accounting 
principles and standards, promote sound and in- 
formati\e financial rep>orting, uphold the dignity 
and honor of the accounting profession, and 
maintain high standards of personal conduct. 



357 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



(b) Acceptance of licensure as a CPA implies 
that the licensee has assumed an obligation to be 
diligent in the performance of professional ser- 
vices; to be fair and honest in relations with cli- 
ents, fellow practitioners and the pubhc; to 
exhibit a proper appreciation of his duties to the 
community and state; and to comply with these 
Rules. Anyone authorized to use the title 
"CPA" in dealing with the public must inform 
the public that they are licensed by this Board. 

(c) The Rules of Professional Ethics and Con- 
duct presuppose that disciplinary assessment of 
a CPA's conduct will be made on the basis of the 
facts and circumstances as they existed at the 
time of the conduct in question. Moreover, the 
rules presuppose that both the decision to take 
disciplinary action and the severity of such action 
depend on all of these facts and circumstances, 
including the willfulness and seriousness of the 
violation, any extenuating factors, and any pre- 
vious violations. In interpreting the rules, one 
should keep in mind that they cover a broad 
range of behavior; consequently, they do not 
specifically enumerate every possible unethical 
act. 

(d) The Rules of Professional Ethics and Con- 
duct apply to all services performed in the prac- 
tice of public accountancy, including tax and 
management advisory services, except: 

(1) where the wording of a rule indicates oth- 
erwise; 

(2) when a CPA is practicing outside the state 
of North Carolina and not rendering ser- 
vices for North Carolina chents, and con- 
sequently, is not subject to discipline for 
departing from any of the rules stated 
herein, as long as his conduct is in accord 
with the statutes and rules of the state, 
district or territory of the United States in 
which he is practicing; or 

(3) when a CPA is practicing outside the 
United States and, consequently, is not 
subject to discipline for departing from 
any of the rules stated herein, as long as 
his conduct is in accord with the rules of 
the organized accounting profession in the 
country in which he is practicing. How- 
ever, when a CPA is associated with fi- 
nancial statements in such a manner as to 
imply that he is acting as an independent 
public accountant and under circum- 
stances that would entitle the reader to 
assume that United States practices were 
followed, he must comply with the re- 
quirements of rules in Section 8G .0200. 

(e) The violation of any of these rules by any 
person associated with a CPA in the practice of 
public accountancy who is either under the 



CPA's supervision, or the CPA's partner or fel- 
low shareholder, will be deemed to be a violation 
of the rule by the CPA unless the CPA exercised 
proper supervision, when required by these rules, 
and neither knew nor had reason to know of the 
violation. 

(f) A CPA shall not permit others to carry out 
on his behalf, with or without compensation, acts 
which if carried out by the CPA would be a vio- 
lation of these rules. 

(g) In the interpretation and enforcement of 
these rules, the Board wiU give consideration, but 
not necessarily dispositive weight, to relevant in- 
terpretations, rulings and opinions issued by the 
boards of other jurisdictions and by appropriately 
authorized ethics committees of professional or- 
ganizations. 

Statutory Authority G.S. 55B-I2; 93-12(9). 

.0102 DISCREDITABLE CO^DLCT 

(a) A CPA shall not engage in conduct dis- 
creditable to the accountancy profession. Dis- 
creditable conduct includes acts of professional 
misconduct and acts that are false, misleading, 
dishonest or deceptive. 

(b) Professional misconduct includes but is not 
limited to: 

(1) attempting to violate the Rules of Profes- 
sional Ethics and Conduct in this Sub- 
chapter; 

(2) knowingly assisting or inducing another to 
violate or attempt to violate the rules, or 
doing so through the acts of another; 

(3) acts that reflect adversely on the CPA's 
honesty, integrity, trustworthiness, good 
moral character or fitness as a CPA in 
other respects; 

(4) stating or implying an abihty to improp- 
erly influence a govenmiental agency or 
official; 

(5) failing to fully cooperate with the Board 
in connection with any inquiry it shaU 
make, including failing to claim mail from 
the U.S. Postal Service and responding 
completely and promptly to all inquiries 
by the Board or its representatives; 

(6) discriminating in employment practices 
based on race, color, religion, sex, national 
origin or handicap; 

(7) failing to comply with any disciplmary 
order issued by the Board; 

(8) failing to perform ser\ices in accordance 
with the conditions, terms or prerequisites 
of a public communication, quotation, 
engagement agreement, or contract; 

(9) regarding an invitation for competitive 
bids on attest services, it shall be discred- 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



35S 



PROPOSED RULES 



itable for a CPA or CPA firm to know- 
ingly offer to perform said services below 
cost for the purposes of injuring or de- 
stroying competition; provided, it shall 
not be a violation to do so in order to 



of judicial proceedings or the findings of govern- 
mental agencies. 

Statutory Authority G.S. 55B-I2: 93-12(9). 



meet competition. Nothing herein shall SECTION .0300 - OTHER RESPONSIBILITIES 



be construed to prohibit competitive bid- 
ding nor establishes a minimum price of 
anv CPA services. 
(c) False, misleading, dishonest or deceptive 
acts include, but are not limited to: 

(1) using deceptive representations in con- 
nection with services performed; 

(2) asserting that services are of a particular 
standard when they are not; 

(3) disparaging the accounting services or 
busmess of another by false, misleading 
or deceptive representations of fact; 

(4) misrepresenting facts or failing to disclose 
relevant facts; 

(5) creating false or unjustified expectations 
of favorable results; 

(6) implying abihties not supported by valid 
education, professional attainments or h- 
censing recognition; or 

(7) providing false or misleading information 
on the qualify'ing experience of an appli- 
cant for a certificate of qualification. 

Statutory Authority G.S. 55B-I2; 93-12(9). 

SECTION .0200 - RESPONSIBILITIES TO 
CLIENTS AND COLLEAGUES 

.0205 CONTINGENT FEES 

(a) Profoocional oor . iooo shall ft©4- be offorod e* 
rondorod undor aa ajrangoment ' i vhtToby fi» fee 
¥rtll be charg e d unlosc i a- speciTiod findmg ef rooult 
i* attaiuL'd. &f whoro Ae foe i* othonvif i o contin 
geprt- upon Ae findingo »f r e sults ef such conicoo. 
How e v e r, fee^ may s'ary doponding, fof oxomplo. 
eft the comploxity ef the service r e nder e d. The 
otlenng or rendering of professional services for. 
or the receipt of, a contingent fee by a CPA is 
not prohibited except for engaging to render or 
rcndenng bv a C PA for a contingent fee: 

( 1) of professional services for, or the receipt 
of such a fee from, anv person for whom 
the CPA also performs attest services, 
during the period of the attest services 
engagement and the period covered by 
any historical financial statements m- 
\olyed in .such attest senices; and 

(2) for the preparation of onginal or amended 
tax returns or claims for tax refunds. 

(b) Fees are not regarded as being contingent 
if fixed by courts or other public authorities or, 
in tax matters, if determined based on the results 



.0302 COMMISSIONS AND REFERRAL FEES 

A CPiV shall ftet- pay a commission te^ obtain a 
cli e nt, Ref shall he accept a commission fop a re- 
forrol te- a cli e nt, &f products e* sersic e s ef othoro. 
Ihis Rul e shall set- prohibit paymonto fef the 
purohasQ ef aa accounting praotioo ef retiromont 
payments to individuals formorly ongagod ift the 
practice &f pubho accounting ©f paymonto t& 
thoir hoiro »f ootatoo. 

(a) The offering or rendering of professional 
services for, or the receipt of, a disclosed com- 
mission bv a CPA is not prohibited. Ihe en- 
ga.gmg to render or rendering of professional 
services bv a CPA for a commission for, or the 
receipt of a commission from, any person for 
whom the CPA also performs attest services is 
prohibited during the period of the attest services 
engagement and the period covered by any his- 
torical linancial statements mvolved m such attest 
services. 



(b) The payment or acceptance of a disclosed 
referral fee is not prohibited. 

Statutory Authority G.S. 55B-I2; 93-12(9). 

SUBCHAPTER 8H - RECIPROCITY 

.0001 RECIPROCAL CERTIFICATES 

(a) Persons who meet the requirements of G.S. 
93-12(6) may apply to the Board for a reciprocal 
certificate. 

(b) The fee for a reciprocal certificate shall be 
the maximum amount allowed by statute. 

(c) An applicant for a reciprocal certificate 
must meet all of the current requirements im- 
posed on an apphcant under G.S. 93-12(5) or the 
following requirements, which the Board consid- 
ers to be substantially equivalent to those re- 
quirements: 

(1) The apphcant has the unrestricted privilege 
to use the CPA title and to practice public 
accountancy in any state or tcmtor)' of 
the United States, or the District of 
Columbia. 

(2) The applicant: 

(A) within ten years immediately preceding 
the filing date of the application, has had 
four years of experience in the field of ac- 
counting under the direct supervision of a 
CP.-\ who held a valid hccnse during the 
period of supervision in any state or tcrri- 



359 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



PROPOSED RULES 



tory of the United States or the District 
of Columbia; or 
(B) has ten years of experience in the field 
of accounting, or ten years of experience 
teaching accounting as defined and calcu- 
lated in 21 NCAC 8F .0409, or any com- 
bination of such experience earned within 
the 12 years immediately preceding the 
filing date of the appUcation. 

(3) The applicant received a score of at least 
75 on each part of the Uniform CPA Ex- 
amination. 

(4) During the two years preceding the appli- 
cant's filing date for a reciprocal certif- 
icate, the applicant has completed 80 
hours of CPE in courses meeting the re- 
quirements of 21 NCAC 8G .0401(a). 
However, applicants who received their 
initial CPA license within four years from 
the fUing date of their appUcation for a 
reciprocal certificate are exempt from this 
CPE requirement. 

(d) An appUcant for change in status or rein- 
statement of a reciprocal certificate that was in- 
active, forfeited, or retired more than 10 years 
before the date of reapplication, must comply 
with all current requirements for a reciprocal 
certificate. 

Statutory Authority G.S. 93-12(6); 93-l2(7a). 

■k***-k-k-k-k-k*-k-k-k-k-k-k*-k 



1\ otice is hereby given in accordance with G.S. 
150B-2I.2 that the N.C. State Board of Cosmetic 
Art Examiners intends to amend rule(s) cited as 
21 NCAC 14L .0105. 

1 he proposed effective date of this action is Au- 
gust 3, 1992. 

1 nstructions on how to demand a public hearing 
(must be requested in writing within 15 days of 
notice): To demand a public hearing, contact 
Vicky Goudie, Executive Secretary, N.C. State 
Board of Cosmetic Art Examiners, Grove Towers, 
Fifth Floor, 1 1 10 Navaho Dr., Raleigh, N.C. 
27609. 



R. 



manicuring is included in their study of 
cosmetology. 

y^omment Procedures: Any interested person 
may request information, permission to be heard, 
or copies of the proposed regulations by writing 
or calling Vicky Goudie, Executive Secretary, 
N.C. State Board of Cosmetic Art Examiners, 
Grove Towers, Fifth Floor, 1 1 10 Navaho Dr., 
Raleigh, N.C. 27609. Telephone: (919) 

850-2793. Comment will be open for 30 days 
from the date of publication. 



CHAPTER 14 - COSMETIC ART EXAMINERS 

SUBCHAPTER I4L - COSMETIC ART 
TEACHERS 

SECTION .0100 - TEACHER QUALIFICATIONS 
AND EXAMINATIONS 

.0105 QUALIFICATIONS - MANICURIST 
TEACHERS 

(a) To be a manicurist teacher, an apphcant 
must: 
(1) 



i^eason for Proposed Action: Licensed 
cosmetologists, who have been practicing 
manicuring full time for a period of five years, or 
who have completed the 320-hour teacher course, 
should also be allowed to take the manicurist 
teacher examination, because the study of 



have a high school diploma or a high 
school graduation equivalency certificate; 

(2) be a registered manicurist or cosmetologist 
in this State; 

(3) have either: 

(A) practiced manicuring in a cosmetic art 
shop for a period equivalent to five years 
of fuU-time work; or 

(B) completed a 320-hour teacher training 
course in manicuring as set forth in Rule 
14L .0202(b) in an approved cosmetic art 
school and practiced manicuring in a cos- 
metic art shop for a period equivalent to 
six months of fuU-time work; and 

(4) pass the manicurist teacher's examination. 

(b) The required six months' experience may 
be gained while a manicurist is enroUed in a 
teacher trainee course, but it must consist of ex- 
perience in a cosmetic art shop. 

(c) AppUcants who are registered manicurists 
in good standing in this State and who were reg- 
ularly employed in a school in this State as a 
teacher of manicuring before January 1, 1991, 
may substitute the equivalent of three years of 
fuU-time teaching in fieu of the requirements of 
Paragraph (a)(3) of this Rule if they apply for a 
Ucense as a manicurist teacher on or before Jan- 
uary 1, 1993. 

Statutory Authority G.S. 88-23. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



360 



FINAL RULES 



1 his section contains rules filed for publication in the North Carolina Administrative Code where 
a notice was not required for publication in the Register. Also, the text of final rules will be published 
in this section upon request of any adopting agency. 



TITLE 17 - DEPARTMENT OF REVENUE 

CHAPTER 9 - MOTOR FUELS TAX DFVISION 

SUBCHAPTER 9H - SPECIAL FUELS TAX 

SECTION .0200 - CONSIGNMENT: SALES EWOICES: TAX FREE DELFVTRIES: METERS: 

MILEAGES 

.0208 REPORTESG SALES AND DELFV FRIES OF NON-HIGFrVVAY DIESEL 

Suppliers are required to file a report and show a full accountability of special fuels. Non-highway 
sales of diesel to bulk users must be listed separately by customer on the report if the bulk users have 
a motor vehicle propelled by diesel. Otherwise, these sales are to be included in a summary total of 
non-highway diesel sales to customers not Ucensed with this Division. 

Histon' Note: Statutory Authority G.S. 105-449.17; 105-449.19; 105-449.32; 
Eff May I, 1992. 

.0209 BULK USERS: PURCHASES OF NON-HIGHW AY DIESEL 

Bulk users are not required to keep inventories or report bulk purchases of non-highway diesel unless 
the bulk users have a motor vehicle propelled by diesel. 

Historv Note: Statutory Authority G.S. 105-449.17; 105-449.21; 105-449.32; 
Eff May I. 1992. 

SECTION .0300 - LIQUIFIED PETROLEUM GAS 

.0305 REPORTESG SALES AND DELFV FRIES: PROPANE GAS SUPPLIERS 

Non-highway sales of propane gas to bulk users must be hsted separately by customer on the report 
if the bulk users have a motor vehicle propelled by propane gas. Otherwise, these sales are to be in- 
cluded in a summar}' total of non-highway propane gas sales to customers not Ucensed with this Divi- 
sion. 

Histoiy Note: Statutory Authority G.S. 105-449.17; 105-449.19; 105-449.32; 
Eff May I. 1992. 

.0306 BULK USERS: PURCHASES OF PROPANE GAS 

Bulk users are not required to keep inventories or report bulk purchases of non-highway propane gas 
unless the bulk users have a motor vehicle propelled by propane gas. 

History Note: Statutoiy Authority G.S. 105-449.17; 105-449.21; 105-449.32; 
Eff May I. 1992. 



361 7:4 NORTH CAROLINA REGISTER May 15, 1992 



LIST OF RULES CODIFIED 



1 he List of Rules Codified is a listing of rules that were filed with OAH in the month indicated. 


Key: 




Citation 


= Title, Chapter. Subchapter and Rule(s) 


AD 


= Adopt 


AM 


= Amend 


RP 


= Repeal 


With Chgs 


= Final text differs from proposed text 


Eff Date 


= Date rule becomes effective 


Temp. Expires 


= Rule was filed as a temporary rule and expires on this date 



NORTH CAROLINA ADMINISTRATIVE CODE 
MARCH 1992 



TITLE DEPARTMENT 

10 Human Resources 

1 1 Insurance 
13 Labor 

15A Environment, Health, 

and Natural Resources 



TITLE DEPARTMENT 

19A Transportation 

21 Occupational Licensing Boards 

46 - Pharmacy 
25 State Personnel 



Citation 


AD 


AM 


RP 


\Nith 
Chgs 


Eff. 
Date 


Temp. 
Expires 


10 NCAC 3R .2214 






• 




04 01 92 




3L .0102 








• 


04 01 92 




.0401 










04 01 92 




.0403 








• 


04 01 92 




.2101 










04 01 92 




.2609 










04 01 92 




14K .0351 










04 01 92 




.0403 








• 


04 01 92 




14M .0711 










04 01 92 




18Q .0520 










04 01 92 




.0542 - .0552 


• 








04 01 92 




26H .0101 - .0102 










04 01 92 




42C .2401 










04 01 92 




42E .0905 - .0906 








• 


05 01 92 




.1207 








• 


05 01 92 




42Z .0604 








• 


05 01 92 




.0901 


• 






• 


05 01 92 





7:4 NORTH CAROLINA REGISTER May 15, 1992 



362 



LIST OF RULES CODIFIED 



Citation 


AD 


AM 


RP 


With 

Chgs 


EfT. 
Date 


Temp. 
Expires 


10 NCAC 45il .0206 




• 






04 01 92 




SOB .0101 




• 






04 01 92 




51G .0101 - .0105 


• 








05 02 92 


10 29 92 


.0201 - .0202 


• 








05 02 92 


10 29 92 


.0301 - .0303 


• 








05 02 92 


10 29 92 


11 NCAC 10 .0105 


• 






• 


04 01 92 




.0402 - .0403 






• 




04 01 92 




.0704 - .0707 






• 




04 01 92 




.0715 - .0716 






• 




04 01 92 




.1102 








• 


04 01 92 




.1107 








• 


04 01 92 




.1604 










04 01 92 




lie .0131 


• 






• 


05 01 92 




13 NCAC 7C .0101 










05 26 92 




.0107 


• 






• 


04 01 92 




15A NCAC 2E .0107 








• 


04 01 92 




.0301 


• 








04 01 92 




7J .0301 










03 31 92 




.0301 










04 01 92 




.0302 










03 31 92 




.0302 










04 01 92 




14B .0002 










04 01 92 




.0005 - .0007 










04 01 92 




.0009 










04 01 92 




.0010 






• 




04 01 92 




ISA .1004 








• 


04 01 92 




.1510 










04 01 92 




.1802 








• 


04 01 92 




.1809 










04 01 92 




.1812 










04 01 92 




.2202 








• 


04 01 92 




.2624 








• 


04 01 92 




.2629 - .2630 










04 01 92 




.3001 - .3(103 


• 






• 


07 01 92 




.3004 - .3005 


• 








07 01 92 




.3006 


• 






• 


07 01 92 




.3007 


• 








07 01 92 





363 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



LIST OF RULES CODIFIED 



Citation 


AD 


AM 


RP 


With 
Chgs 


EfT. 
Date 


Temp. 
Expires 


15A NCAC 18A .3008 - .3009 








• 


07 01 92 




.3010 .3011 










07 01 92 




.3012 








• 


07 01 92 




.3013 










07 01 92 




.3014 








• 


07 01 92 




.3015 










07 01 92 




.3016 








• 


07 01 92 




.3101 - .3105 
Transferred and 
Recodified from 
15A NCAC 21 E 
.0401 - .0405 










02 18 92 




18C .1508 










04 01 92 




.1510 










04 01 92 




.1515 - 1518 










04 01 92 




.1523 










04 01 92 




.1527 










04 01 92 




.1536 


• 








04 01 92 




.2101 ■ .2105 


• 








04 01 92 




19A .0202 




• 




• 


04 01 92 




19B .0203 




• 






04 01 92 




.0302 




• 






04 01 92 




.0304 




• 






04 01 92 




.0305 






• 




04 01 92 




.0309 




• 






04 01 92 




.0311 




• 






04 01 92 




.0320 - .0321 




• 






04 01 92 




21 E .0401 - .0405 

Transferred and 
Recodified to 
15A NCAC 18A 
.3101 - .3105 










02 18 92 




.0501 


• 






• 


04 01 92 




21 F .0701 








• 


04 01 92 




24A .0202 










04 01 92 




.0303 










04 01 92 




19A NCAC 3D .0801 










03 30 92 


09 26 92 


21 NCAC 46 .1403 








• 


04 01 92 




.1503 








• 


04 01 92 




25 NCAC ID .0611 










04 01 92 





7:4 NORTH CAROLINA REGISTER May 15, 1992 



364 



RRC OBJECTIONS 



1 he Rules Review Commission (RRC) objected to the following rules in accordance with G.S. 
l43B-30.2(c). State agencies are required to respond to RRC as provided in G.S. l43B-30.2(d). 



AGRICULTURE 

Plant Industry 

2 NCAC 4SA .0239 - Permit to Sell Bees 

Agency Revised Rule 
2 NCAC 43 A .0240 - Form BS-II 

Agency Revised Rule 
2 NCAC 4SA .061 / - Program Participation and Payment of Fees 

Agency Revised Rule 
2 NCAC 4SE .0101 - Definitions 

.Agency Revised Rule 

Agency Responded 

Agency Withdrew Rule 

CRIME CONTROL AND PUBLIC SAFETY 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
RRC Objection 
No Action 



04:16,92 
04 J 6: 92 
04il6;92 
041 16192 
04:16 92 
04:16 92 
10; 17:91 
10:17:91 
12119:91 
02120:92 



State Highway Patrol 

14 A NCAC 9H .0304 - Notifying Registered Owner 
No Response from Agency 
Agency Withdrew Rule 

ECONOMIC AND COMMU^ITV DEVELOPMENT 

Banking Commission 

4 NCAC 3C .0807 - Subsidiary In\-estment Approval 

Agency Revised Rule 
4 NCAC 3C .0901 - Books and Records 

Agency Revised Rule 
4 NCAC 3C .0903 - Retention: Reproduction^ Disposition of Bank Records 

Agency Revised Rule 
4 NCAC 3D .0302 - Administration of Fiduciary Powers 

Agency Revised Rule 
4 NC.4C 3H .0/02 - Regional Bank Holding Company Acquisitions 

Agency Re\'ised Rule 

Community Assistance 

4 NCAC 19L .0/03 - Definitions 

Agency Revised Rule 
4 NCAC /9L .0403 - Size and Use of Grants .Made to Recipients 
4 NC.'iC /9L .0407 - General .Application Requirements 
4 NCAC 19L .130/ - Definition 

Agency Raised Rule 

Credit L'nion Division 



RRC Objection /2 19 9/ 

No Action 0/:24:92 

02120,92 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



RRC Objection 
Obj. Removed 
RRC Objection 
RRC Objection 
RRC Objection 
Obj. Removed 



04 /6 92 
04/6 92 
04,16:92 
04:/ 6:92 
041/6:92 
04/6:92 
04:/ 6:92 
041/6,92 
04:/ 6192 
04/6,92 



04 /6, 92 
04/6 92 
04:/ 6,92 
04>/6'92 
04:16,92 
04,/ 6 92 



4 NCAC 6C .0407 . Business Loans 



RRC Objection 0/ 24 92 



365 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



RRC OBJECTIONS 



Agency Revised Rule 
Savings Institutions Division: Savings Institutions Commission 

4 NCAC I6F .000/ - Permitted Activities 

Agency Re\'ised Rule 
4 NCAC 16F .0008 - Finance Subsidiary Transactions With Parent 

Agency Revised Rule 
4 NCAC I6F .0009 - Issuance of Securities by Finance Subsidiaries 

Agency Revised Rule 
4 NCAC I6F .0011 - Holding Company Subsidiaries! Finance Subsidiaries 

Agency Revised Rule 

EMVIRONMENT, HEALTH, AND NATURAL RESOURCES 



Obj. Removed 02/20192 



RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 
RRC Objection 
Obj. Removed 



041 16192 
04/16192 
041 16192 
041 16192 
041/6/92 
04// 6/ 92 
04// 6/92 
04// 6/ 92 



Coastal Management 

ISA NCAC 7H .0306 - General Use Standards for Ocean Hazard Areas 

Agency Responded 

Rule Returned to Agency 

Agency Filed Rule with OAH 
ISA NCAC 7 J .0301 - Who is Entitled to a Contested Case Hearing 

Rule Returned to Agency 

Agency Filed Rule with OA H 
ISA NCAC 7 J .0301 - Who is Entitled to a Contested Case Hearing 

Rule Returned to Agency 

Agency Filed Rule with OA H 
ISA NCAC 7 J .0302 - Petition For Contested Case Hearing 

Rule Returned to Agency 

Agency Filed Rule with OAH 
ISA NCAC 7 J .0302 - Petition For Contested Case Hearing 

Rule Returned to Agency 

Agency Filed Rule with OA H 
ISA NCAC 7 J .0402 - Criteria for Grant or Denial of Permit Applications 
ISA NCAC 7M .0201 - Declaration of General Policy 

Agency Responded 

Agency Responded 

Rule Returned to Agency 

Agency Filed Rule with OAH 
ISA NCAC 7M .0202 - Policy Statements 

Agency Responded 

Agency Responded 

Rule Returned to Agency 

Agency Filed Rule with OA H 
ISA NCAC 7M .0303 - Policy Statements 

Agency Responded 

Agency Responded 

Rule Returned to Agency 

Agency Filed Rule with OA H 
ISA NCAC 7M .0403 - Policy Statements 

Agency Responded 

Agency Responded 

Agency Rexised Rule 
ISA NCAC 7M .0901 - Declaration of General Policy 

Agency Responded 

Agency Responded 



RRC Objection 


01/24/92 


No Action 


01/24/92 




01/24/92 


Eff 


03/01/92 


RRC Objection 


02/20/92 




03/19/92 


Eff 


03/31/92 


RRC Objection 


03/19/92 




03/19/92 


Eff 


04/01/92 


RRC Objection 


02/20/92 




03/19/92 


Eff 


03/31/92 


RRC Objection 


03/19/92 




03/19/92 


Eff 


04/01/92 


RRC Objection 


I0/I7/9I 


RRC Objection 


/0//7I9I 


No Action 


I2/I9/9I 


No Action 


01/24/92 




01/24/92 


Eff 


03/01/92 


RRC Objection 


I0/I7/9I 


No Action 


12/19/91 


No A ction 


01/24/92 




01/24/92 


Eff 


03/01/92 


RRC Objection 


10/17/91 


No Action 


12/19/91 


No Action 


01/24/92 




01/24/92 


Eff 


03/01/92 


RRC Objection 


10/ 17 19 1 


No A ction 


12/19191 


No Action 


01/24192 


Obj. Removed 


02/20/92 


RRC Objection 


10/ 17/9/ 


No Action 


/2//9/91 


No Action 


01/24/92 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



366 



RRC OBJECTIONS 



Rule Returned to Agency 
Agency Filed Rule with OAH 

Environmental Management 

15A NCAC 2E .0107 - Delegation 
Agency Revised Rule 

Governor's Waste Management Board 

ISA NCAC I4B .0002 - Definitions 
Agency Revised Rule 

Radiation Protection 

ISA NCAC II .0338 - Specific Terms and Conditions of Licenses 

Agency Revised Rule 
ISA NCAC II .0339 - E.xpiration of Licenses 

Agency Revised Rule 

Sedimentation Control 

ISA NCAC 4 A .000 S - Definitions 

Agency Responded 

Agency Revised Rule 
ISA NCAC4C .0007 - Procedures: .Xotices 

Agency Responded 



Eff 



01/24/92 
03/01/92 



RRC Objection 03/19/92 
Obj. Removed 03/19/92 



RRC Objection 
Obj. Removed 



03/19/92 
03/19/92 



RRC Objection 04/16/92 

Obj. Removed 04/16/92 

RRC Objection 04/16/92 

Obj. Removed 04/16/92 



RRC Objection 
No Action 
Obj. Removed 
RRC Objection 
No Action 
Obj. Removed 



12/19/91 
01/24/92 
02/20/92 
12/19/91 
01/24 1 92 
02/20/92 



HUMAN RESOURCES 



Facility Services 








10 NCAC 3 J .2801 - Supervision 




RRC Objection 


04/16/92 


Agency Revised Rule 




RRC Objection 


04/16/92 


10 NCAC 3 J .290S - Personal Hygiene Itefns 




RRC Objection 


10/17,91 


10 NCAC 3J .3401 - Applicability - Construction 




RRC Objection 


04/16/92 


Agency Revised Rule 




RRC Objection 


04/16/92 


10 NCAC 3L .0902 - License 




RRC Objection 


04116/92 


Agency Re\'ised Rule 




Obj. Removed 


04/ 16m 


10 NCAC 3L .0903 - Application for and Issuance of License 




RRC Objection 


04/16 92 


Agency Revised Rule 




Obj. Removed 


04/16/92 


10 NCAC 3L .0904 - Inspections 




RRC Objection 


04/16/92 


Agency Revised Rule 




Obj. Removed 


04/16/92 


10 NCAC 3L .090S - Multiple Premises 




RRC Objection 


04/16:92 


Agency Revised Rule 




Obj. Removed 


04/16/92 


10 NCAC 3L .1202 - Case Review and Plan of Care 




RRC Objection 


04/16/92 


10 NCAC 3U .0102 - Definitions 




RRC Objection 


03/19:92 


Agency Revised Rule 




Obj. Removed 


03 i 19 92 


Indi\idual and ramily Support 








10 NCAC 42E .090S - Personnel: Centers: Homes with Operator 


Staff 


RRC Objection 


01! 24 92 


Agency Responded 




No Action 


021 20-92 


Agency Revised Rule 




Obj. Removed 


03! 1992 


10 NCAC 42E .0906 - Personnel: Day Care Homes:/ Staff Person/ Op 


RRC Objection 


01 24:92 



367 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



RRC OBJECTIONS 



Agency Responded 

Agency Revised Rule 
10 NCAC42E .1207 - Procedure 

Agency Responded 

Agency Revised Rule 
10 NCAC42Z .0604 - Staff Requirements 

Agency Responded 

Agency Revised Rule 
10 NCAC42Z .0901 - Procedure 

Agency Responded 

Agency Revised Rule 



No Action 
Obj. Removed 
RRC Objection 
No Action 
Obj. Removed 
RRC Objection 
No Action 
Obj. Removed 
RRC Objection 
No Action 
Obj. Removed 



02/20192 
03/19/92 
01/24/92 
02/20/92 
03/19/92 
01/24/92 
02/20/92 
03/19/92 
01/24/92 
02/20/92 
03/19/92 



Mental Health: General 



10 NCAC 14S .0102 - Communication Rights 

Agency Responded 
10 NCAC 145 .0103 - Living Environment 

Agency Responded 



A RRC Objection 9/19/91 
10/17/91 

A RRC Objection 9/19/91 
10/17/91 



LABOR 



Elevator and Amusement Device 



13 NCAC 15 .0402 - Responsibility for Compliance 
13 NCAC 15 .0429 - Go Karts 
Agency Revised Rule 



RRC Objection 04:16/92 
RRC Objection 04, 16/92 
Obj. Removed 04/16/92 



LICENSING BOARDS AND COMMISSIONS 



Certified Public Accountant Examiners 



* 21 NCAC8G .0313 - Firm Name 
Agency Responded 



RRC Objection 
No Action 



10/17/91 
12/19/91 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



368 



RULES INVALIDA TED BY JUDICIAL DECISION 



1 his Section of the Register lists the recent decisions issued by the North Carolina Supreme Court, 
Court of Appeals, Superior Court (when available), and the Office of Administrative Hearings which 
im-alidate a rule in the Sorth Carolina Administrative Code. 



25 \CAC IB .0414 - SITUA TIOXS I\ WHICH A TTORSEYS FEES MA Y BE A WARDED 

Robert Roosevelt ReiUy Jr., Administrative Law Judge with the Office of Administrative Hearings, de- 
clared Rule 25 NCAC IB .0414 void as applied in William Paul Fearrington, Petitioner v. University oj 
North Carolina at Chapel Hill, Respondent (91 OSP 0905). 



369 7:4 NORTH CAROLINA REGISTER May 15, 1992 



CONTESTED CASE DECISIONS 



1 his Section contains the full text of some of the more significant Administrative Law Judge 
decisions along with an index to all recent contested cases decisions which are filed under North 
Carolina's Administrative Procedure Act. Copies of the decisions listed in the index and not 
published are available upon request for a minimal charge by contacting the Office of Adminis- 
trati\-e Hearings, (919) 733-2698. 



KEY TO CASE CODES 



ABC Alcoholic Beverage Control Com- 
mission 

BDA Board of Dental Examiners 

BME Board of Medical Examiners 

BMS Board of Mortuary Science 

BOG Board of Geologists 

BON Board of Nursing 

BOO Board of Opticians 

CFA Commission for Auctioneers 

COM Department of Economic and Com- 
munity Development 

CPS Department of Crime Control and 

Public Safety 

CSE Child Support Enforcement 

DAG Department of Agriculture 

DCC Department of Community Colleges 

OCR Department of Cultural Resources 

DCS Distribution Child Support 

DHR Department of Human Resources 

DOA Department of Administration 

DOJ Department of Justice 

DOL Department of Labor 

DSA Department of State Auditor 

DST Department of State Treasurer 



EDC 
EHR 

ESC 
HAF 

HRC 

IND 

INS 

LBC 

MLK 

NHA 

OAH 

OSP 

PHC 

POD 

SOS 

SPA 



WRC 



Department of Public Instruction 
Department of Environment, Health, 
and Natural Resources 
Employment Security Commission 
Hearing Aid Dealers and Fitters 
Board 

Human Relations Commission 
Independent Agencies 
Department of Insurance 
Licensing Board for Contractors 
Milk Commission 

Board of Nursing Home Administra- 
tors 

Office of Administrative Hearings 
Department of State Personnel 
Board of Plumbing and Heating 
Contractors 

Board of Podiatry Examiners 
Department of Secretary of State 
Board of Examiners of Speech and 
Language Pathologists and Audiol- 
ogists 
Wildlife Resources Commission 



CASE NAME 


CASE 
NLMBER 


Al J 


FILED 
DATE 


Alyce W. Pringle 

V. 

Department of Education 


88 OSP 0592 
88 EEO 0992 


Morgan 


03 27 92 


Susie Woodle 

V. 

Department of Commerce, State Ports Authority 


88 OSP 1411 


Mann 


03 25 92 


Fernando Dcmeco White 

V. 

DHR, CasvveU Center 


89 OSP 0284 


West 


011092 


Cathy Faye Barrow 

v. 
DHR, Craven County Hcahh Department 


89 DHR 0715 


Morgan 


03 09 92 


Kenneth W. WTiite 

V. 

Employment Sccurit)' Commission 


90 OSP 0390 


Becton 


01 13 92 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



370 



CONTESTED CASE DECISfONS 



CASE NAME 


CASE 
NLMBER 


ALJ 


FILED 
DATE 


Craig S. Eury- 

V. 

Employment Security Commission 


90OSP0391 


Becton 


01.13,92 


Jolene H. Johnson 

V. 

DHR, Division of Medical Assistance 


90 DHR 0685 


Morgan 


02 2L'92 


Joseph F. Nunes 

V. 

DHR, Division of Social Services, CSE 


90 CSE 1036 


Morgan 


04 15,92 


Sgt. Carl Edmunds 

V. 

DHR, Division of Social Senices, CSE 


90 CSE 1135 


Nesnow 


0204 92 


Rafael Eigueroa 

V. 

DHR, Division of Social Services, CSE 


90 CSE 1138 


Morgan 


03,30,92 


Sainirue L. Erazier 

V. 

DHR. Division of Social Services, CSE 


90 CSE 1167 


Morgan 


03 24 92 


Richard A. Boyett 

v. 

DHR, Division of Social Ser\ices, CSE 


90 CSE 1184 


Morgan 


03 30 92 


Lance McQueen 

V. 

DHR. Di\ision of Social Services, CSE 


90 CSE 1204 


.Morgan 


03 30 92 


Kermit Lmney 

v. 

Department of Correction 


90 OSP 1380 


.Morrison 


02 12.92 


Larry D. Dates 

V. 

Department of Correction 


90 OSP 1385 


Becton 


04 06 92 


Eemando Guarachi 

v. 

DHR, Division of Social Ser\ices, CSE 


90 CSE 1393 


Morgan 


04 07 92 


Jerry Odell Johnson 

v. 
Sheriffs' Education & Training Standards Coinm 


90 DOJ 1411 


Morgan 


01 09 92 


Stoney \V. & Darlene L. Thompson 

v. 
Department of Environment, Health, & Natural Resources 


91 EHR 0003 


West 


01 06,92 


Gloria Jones/ Medbill 

V. 

Children Special Health Sen, ices 


91 EHR 0142 


Morgan 


03 11 92 


Shonn S. Peek 

v. 

Bd of Trustees/Teachers' & St Emp Retirement Sys 


91 DST 0147 


Gray 


04 16 92 


Willie C. Rone 

V. 

DHR, Division of Social Ser\ices, CSE 


91 CSE 0166 


Morgan 


04 13 ^2 



371 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



CONTESTED CASE DECISIONS 



CASE NAME 


CASE 
NUMBER 


ALJ 


FILED 
DATE 


Thomas Such 

V. 

EHR and William W. Cobey Jr. 


91 OSP 0202 


Becton 


02/20/92 


N.C. Human Relations Comm. on behalf of Deborah Allen 

V. 

Charles Watkins 


91 HRC0204 


Morrison 


03/17/92 


Cindy Gale Hyatt 

V. 

Department of Human Resources 


91 DHR 0215 


Morgan 


02/27/92 


Gliston L. Morrisey 

V. 

Bd of Trustees Teachers' & St Emp Retirement Sys 


91 DST0232 


West 


02/03/92 


Anthony Caldwell 

V. 

Juvenile Evaluation Center 


91 OSP 0259 


Morgan 


03/12/92 


Kenneth R. Downs, Guardian of 
Mattie M. Greene 

V. 

Teachers' & St Emp Comp Major Medical Plan 


91 DST 0261 


Gray 


02/20/92 


Deborah W. Clark 

V. 

DHR, Dorothea Dix Hospital 


91 OSP 0297 


Nesnow 


01/16/92 


Wade R. Bohon 

V. 

DHR, Division of Social Services, CSE 


91 CSE 0312 


Marm 


01/14,92 


Betty L. Rader 

V. 

Teachers' & St Emp Major Medical Plan 


91 DST 0330 


Morgan 


01/10,92 


Marcia Carpenter 

V. 

UNC - Charlotte 


91 OSP 0346 


Mann 


03/12 92 


James Arthur Lee 

V. 

NC Crime Victims Compensation Commission 


91 CPS 0355 


Chess 


03/05/92 


Fred A. Wilkie 

V. 

Wildlife Resources Commission 


91 OSP 0398 


Chess 


04/20/92 


Michael Darwin White 

V. 

Department of Environment, Health, & Natural Resources 


91 OSP 0413 


Morrison 


02/14/92 


Curtis Wendell Bigelow 

V. 

CCPS. Division of State Higliway Patrol 


91 OSP 0418 


West 


03 10 92 


Alcoholic Beverage Control Commission 

v. 

Hilsinger Enterprises, Inc., t'a The Watcnn Hole 


91 ABC 0442 


Gray 


01/10 92 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



372 



CONTESTED CASE DECISIONS 



CASE NAME 


CASE 
NUMBER 


ALJ 


FILED 
DATE 


Penny Whitfield 

V. 

Pitt County Mental Health Center 


91 OSF0465 


Cjray 


01/08/92 


Senior Citizens' Home Inc. 

V. 

DHR, Division of Facility Senices, Licensure Section 


91 DHR 0467 


Gray 


02/18/92 


/Vlcoholic Beverage Control Commission 

V. 

Everett Ixc Williams Jr., t 'a Poor Boys Gameroom 


91 ABC 0531 


Morrison 


01/31/92 


Jonathan Russell .VlcCravey, t/a Encore 

V. 

Alcoholic Beverage Control Commission 


91 ABC 0534 


Morrison 


02/04/92 


Dorothy "Cris" Crissman 

v. 

Department of Public Instruction 


91 OSP0581 


■Vlorrison 


04/03/92 


Horace Britton Askew Jr. 

v. 

Sheriffs' Education & Training Standards Comm 


91 DOJ 0610 


Reilly 


01/22/92 


Roy L. Keever 

V. 

Department of Correction 


91 OSP0615 


West 


02/26/92 


Ten Broeck Hospital (Patient #110587, 

Medicaid #1 24-24-480 1-C) 
Ten Broeck Hospital (Patient #110538, 

Medicaid #240334254S) 
Ten Broeck Hospital (Patient #1 10788, 
Medicaid #900- 12-6762-T) 
v. 
DHR, Division of Medical Assistance 


91 DHR 0618 
91 DHR 0429 
91 DHR 1265 


Morrison 


04,08/92 


larry Madison Chatman, t/a Larry's Convenient Store 

v. 
Alcoholic Beverage Control Commission 


91 ABC 0626 


Gray 


02/20,92 


Cecil Leon Neal 

V. 

Department of Economic & Community Development 


91 OSP 0648 


Mann 


02,07,92 


DAG, Eood & Drug Protection Div, Pesticide Section 

V. 

D. Carroll \'ann 


91 DAG 0654 


.Morrison 


01/15/92 


Kidd's Day Care and Preschool 

V. 

Child Day Care Section 


91 DHR 0666 
91 DHR 0666 


Becton 


03/25/92 
04 10,92 


Mary Tisdale 

V. 

Hyde County Health Department and EHR 


91 EHR 0f,79 


Morgan 


03,23 92 


Alcoholic Beverage Control Commission 

V. 

Kenneth Richard Cooper, t/a Silvers 


91 ABC 0680 


Becton 


02 26 92 



373 



7:4 NORTH CAROLINA REGISTER Mm' 15, 1992 



CONTESTED CASE DECISIONS 



CASE NAME 


CASE 
NUMBER 


AEJ 


FILED 
DATE 


Sarah Linda Hankins 

V. 

AJcohoIic Beverage Control Commission 


91 ABC 0688 


Mann 


02/27/92 


Keith HuU 

V. 

DHR - Division of Medical Assistance 


91 DHR 0707 


Chess 


02/27/92 


John E. Canup 

V. 

DHR, Division of Social Services, CSE 


91 CSE 0759 


Reilly 


01/13/92 


Falcon Associates, Inc. 

V. 

Department of Environment, Health, & Natural Resources 


91 EHR 0767 
91 EHR 0768 


West 


01/06/92 


Michael F. Stone 

v. 

Bd of Trustees/ Local Gov't Emp Retirement Sys 


91 DST0771 


West 


02/24/92 


Ruben Gene McLean 

V. 

Alcoholic Beverage Control Commission 


91 ABC 0772 


Nesnow 


01/30/92 


Bobby McEachem 

V. 

FayetteviUe State L'niversity 


91 OSP0839 


Gray 


02/06/92 


Singletree, Inn 

v. 

EHR, and Stokes County Health Department 


91 EHR 0840 


Nesnow 


01/16/92 


Henry B. Earnhardt 

V. 

Mt Pleasant Vol Fire Dcpt, St Auditor 'Firemen's 
Rescue Squad Workers' Pension Fund 


91 DSA 0843 


RciUy 


01/29/92 


Mackey L. Hall 

V. 

DHR, Division of Social Services, CSE 


91 CSE 0854 


Reilly 


01/17/92 


Gloria J. Woodard 

v. 

Division of Motor Vehicles 


91 OSP0855 
91 OSP 0855 


Mann 


04, 09, 92 
04 13 92 


Kay Long 

V. 

Department of I luman Resources 


91 DHR 0873 


RciUy 


03/17/92 


.Alcoholic Beverage Control Commission 

V. 

Mack Ray Chapman, t a Ponderosa Lounge 


91 ABC 0887 


Morrison 


01/31,92 


Joseph W. Devhn Jr., Johnson Brothers Carolina Dist 

V. 

Alcoholic Beverage Control Commission 


91 ABC 0890 


West 


02 11,92 


Ossie Beard 

V. 

EHR & Wastewater Treatment Plant Certification Comm. 


91 EHR 0893 


Nesnow 


03/12,92 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



374 



C0.\ TESTED CASE DECISIO.'VS 



CASE NAME 


CASE 
MMBER 


ALJ 


FILED 
DATE 


.Mcoholic Be\erage Control Commission 

V. 

Trinity C. C. Inc., t a Trinity College Cafe 


91 ABC 0915 


West 


02 1 1 92 


N.C. .Vlcoholic Bc\erage Control Comrmssion 

V. 

Jessie Pendergraft Rigsbee, T A Club 2000 


91 ABC 0919 


West 


03 12 92 


.-\lcoholic Be\erage Control Comrmssion 

V. 

Cedric Warren Edwards, t a Great. .-Vmerican Food Store 


91 ABC 0923 


Becton 


02 26 92 


Department of Environment, Health, & Natural Resources 

V. 

Hull s Sandwich Shop. Andy Hull 


91 EHR 0936 


West 


01 09 92 


Betty Da\is d b a ABC Academy 

V. 

DHR. Division of Facility Ser\ices. Child Day Care Section 


91 DHR 0955 


Morrison 


01 31 92 


Thomas J. Hailey 

V. 

EHR and Rockingham County Health Department 


91 EHR 0957 


Becton 


01 15 92 


Ronald Wavcrly Jackson 

V. 

FHR. Division of Matemal cS: Child Health, WIC Section 


91 EHR 0963 


Gray 


02 24 92 


Century Care of Faurmburg, Inc. 

V. 

DHR. Di\ision of Facility Services. Ficcnsure Section 


91 DHR 0981 


Cjray 


03 24 92 


David J. Anderson 

V. 

DHR. Di\-ision of Social Services. CSF 


91 CSE 0989 


Morgan 


04 20 92 


Herbert R. Clavlon 

V. 

DHR. Division of Social Services. CSE 


91 CSE 1000 


Mann 


04 02 92 


Roy Shealey 

V. 

\'ictims Compensation Commission 


91 CPS 1002 


Momson 


01 31 92 


Joe F. Williams Jr. 

V. 

DHR. Di\ision of Social Services. CSE 


91 CSE 1014 


Momson 


04 30 92 


Wniie Brad Baldwin 

V. 

DHR. DiN'ision of Social Services, CSE 


91 CSE 1020 


Reilly 


01 2S 92 


Clinton Dawson 

v. 

N-C. Department of Transportation 


91 OSP 1021 


.Mann 


03 05 92 


Benjamin C. Dawson 

V. 

Department of Correction 


91 OSP 11125 


^^•est 


02 IS 92 


Paulette R. Smith 

v. 

DHR. Division of Social Senices, CSE 


91 CSE 1026 


Reilly 


02 27 92 



3-5 



7:4 NORTH CAROLIi\'A REGTSTER May 15, 1992 



CONTESTED CASE DECISIONS 



CASE NAME 


CASE 
NLMBER 


ALJ 


FILED 
DATE 




Scot Dawson 

V. 

Department of Labor 


91 DOL 1031 


West 


02/24/92 




Luis A. Rosario 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1046 


Morrison 


03/03/92 




Elijah Jefferson Jr. 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1055 


Gray 


04/20/92 




Randy Quinton King 

v. 

CCPS, State Highway Patrol 


91 OSP 1064 


Gray 


03/24/92 




James D. Robinson 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1068 


Gray 


04,'29;92 




William H. Hogsed 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1070 


Nesnow 


03/16 92 




David L. Brown 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1074 


Morrison 


03/31/92 




Donald \L Washington 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1078 


Morrison 


03/04/92 




William F. DnscoU 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1080 


Mann 


04/28/92 




Melvin L. Miller Sr. 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1084 


Morrison 


03/16/92 




Bobby G. Evans 

v. 

DHR, Division of Social Services, CSE 


91 CSE 1094 


Reilly 


01,13/92 




William Louis Timmons 

V. 

DHR, Division of Social Sen'iccs, CSE 


91 CSE 1104 


Mann 


02 18 92 




Edmund D. Hester 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1113 


Mann 


04 21 92 




Raymond Junior Cagle 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1123 


Mann 


03 30 92 




Richard E. Murray 

V. 

Department of Human Resources 


91 CSE 1134 


Reilly 


Ul 13 92 




Pathia Miller 

V. 

DHR, Division of Facilitv Services, Child Dav Care Section 


91 DHR 1135 


Mann 


03 31 92 








7:4 NOR TH CAROLINA REGIS Tl 


IR May 15, 


1992 


5: 


'6 



CONTESTED CASE DECISIONS 



CASK ^AM^: 


CASE 
MM HER 


ALJ 


FILED 
DAIE 


Atlantic Enterprises, Inc. 

V. 

Department of Frivironmcnt, Health, & Natural Resources 


91 EHR 1136 


Reilly 


01/23/92 


Theresa M. Sparrow 

V. 

Criminal Justice Education & Training Standards Comm 


91 DOJ 1138 


Mann 


02,04/92 


Darrel D. Shields 

V. 

DUR, Division of Social Services, CSE 


91 CSE 1141 


Morgan 


03/30/92 


James A. Hinson 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1154 


Mann 


02 18/92 


George H. Parks Jr. 

V. 

DHR. Division of Social Services, CSE 


91 CSE 1157 


.Morrison 


01/27/92 


Adnan Chandler Harley 

v. 

DHR. Division of Social Services, CSE 


91 CSE 1180 


Nesnow 


02/10/92 


Billy J. Hall 

v. 
DHR, Division of Social Services, CSE 


91 CSE 1182 


Nesnow 


02/10/92 


Donaldson L. Wooten 

V. 

DHR, Division of Social Ser\'ices, CSE 


91 CSE 1189 


Reilly 


03 T 3/ 92 


William P. Rcid 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1193 


Nesnow 


02/04/92 


Jeddie R. Bowman 

v. 
DHR, Division of Social Scr\'iccs, CSE 


91 CSE 1195 


Momson 


04, 30, 92 


Ronald G. Bolden 

v. 
DHR, Division of Social Services, CSE 


91 CSE 1208 


Gray 


02 26'92 


Wavne Phillip Irby 

V. 

DHR. Di\ision of Social Services, CSE 


91 CSE 1211 


Nesnow 


02 04 92 


Tony Hollingsworth 

v. 

DHR, Di\ision of Social Services, CSE 


91 CSE 1212 


Nesnow 


02/10/92 


Russell G. Ginn 

v. 

Department of Correction 


91 OSP 1224 


Reilly 


02 14/92 


Angela McDonald .McDougald 

V. 

DHR. Di\ision of Social Ser\ices. CSl- 


c)l CSE 1227 


Nesnow 


02 28 92 


Sering 0. .\lbye 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1228 


Mann 


03 1 1 92 



377 



7:4 NORTH CAROLINA REGISTER Mav 15, 1992 



I 



CONTESTED CASE DECISIONS 



CASE NAME 


CASE 
MMBER 


AU 


FILED 
DAIE 


Arthur Thomas McDonald Jr. 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1252 


Morrison 


03/31/92 


Stanford Earl Kern 

V. 

DHR, Division of Social Ser\ices, CSE 


91 CSE 1255 


Nesnow 


02/04/92 


Gene Weaver 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1264 


Reilly 


03/25,92 


James T. White 

V. 

DHR, Division of Social Ser\ices, CSE 


91 CSE 1271 


Gray 


0227/92 


Ronald Brown and Regina Brown 

v. 
DHR, Division of Facility Ser\'ices 


91 DHR 1278 


Becton 


02/25,92 


Samuel Aimwood 

V. 

David Brantley, Wayne County Clerk of Superior Court 


91 CSE 1285 


Reilly 


02 1L92 


Peter Gray Coley 

V. 

DHR, Division of Social Ser\ices, CSE 


91 CSE 1297 


Reilly 


04 21 92 


Enos \I. Cook 

v. 

DHR, Division of Social Services, CSE 


91 CSE 1303 


Morrison 


04 13 92 


Raymond Vaughan 

V. 

DHR, Division of Social Services, CSE 


91 CSE 1304 


Reilly 


03 09,92 


Staidey Wayne Gibbs 

V. 

Elizabeth City State University 


91 OSP 1318 


Gray 


01 14 92 


David Martin Strode 

v. 

DHR, Division of Social Services, CSE 


91 CSE 1327 


Morgan 


03 19 92 


/Vnthony T. McNeill 

V. 

DHR, Di\ision of Social Scr\ices, CSE 


91 CSE 1336 


Becton 


04 20,92 


D. C. Bass 

V. 

Department of Crime Control and Public Safety 


91 OSP 1341 


Chess 


04 07 92 


Steveason M. Bailey 

V. 

McDowell Technical Community College 


91 OSP 1353 


Morrison 


01 28,92 


Gar\' N. Rhoda 

V. 

Department of Correction 


91 OSP 1361 


Nesnow 


01 31 92 


William A. Sellers 

V. 

DHR, Di\-ision of Social Services, CSE 


91 CSE 1395 


Gray 


04 01 92 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



57 S 



CONTESTED CASE DECISIONS 



CASE NAME 


CASE 
NUMBER 


,\LJ 


FILED 
DATE 


Marc D. Walker 

V. 

CCPS, Division of State Highway Patrol 


91 OS? 1399 


Morrison 


03; 16; 92 


Serena Gaynor 

V. 

DHR, Di\ision of Vocational Rehabilitation 


91 OSP 1403 


Gray 


03 02 92 


Betty Davis, D B; A ABC Academy 

V. 

DHR. Di\ision of Facility Ser\'ices, Child Day Care Section 


91 DHR 1408 


Chess 


03 30,92 


Bill Jones Jr. and Jessie F. Jones 

V. 

Department of Human Resources 


91 DHR 1411 


Nesnow 


05,01,92 


Charles R. WeUons II 

V. 

Department of Environment, Health. & Natural Resources 


91 EHR 1418 


West 


02,25 92 


Charley Joe .Milligan 

V. 

Bd of Trustees, Local Govt Emp Retirement Sys 


91 DST 1424 


Gray 


02,27,92 


Roy Blalock, Deborah liakins. John Gordon Wriglit 

V. 

INC - Chapel Hill 


91 OSP 1429 
91 OSP 1430 


Gra\ 


03 13 92 


James R. Fath 

V. 

Crime \'ictims Compensation Commission 


91 CPS 1451 


.Morrison 


04 15 92 


Ollie Robertson 

V. 

Crime Victims Compensation Commission 


92 CPS 0002 


Morrison 


04 15 92 


New Bem-Cra\en County Board of Education, 
a StatutoPv' Corporation of North CaroUna 

V. 

The Honorable Harlan E. Boyles, State Treasurer, 

The Honorable Fred W. Talton. State Controller, 

The Honorable William W. Cobey, Jr., Sec. of FHR. 

Dr. George T. Everett, Dir.. Div. of Environmental .\Igmt. 


92 EHR 0003 


Redly 


03,13,92 


Ellen .All20od, The Red Bear Lounge. Inc., 
4022 North .Mam St., High Point, NC 27265 

V. 

.Alcoholic Beverage Control Commission 


92 ABC 0007 


Chess 


04 07 92 


Private Protective Services Board 

v. 

Robert R. Missildine, Jr. 


92 DOJ 0025 


Becton 


03 23;92 


Cindy G. Bartlett 

V. 

Department of Correction 


92 OSP 0029 


Reilly 


03 16 92 


Mr. Kenneth I. Smith. Pitt County NLirt. Inc. 

V. 

FHR. DiviMon of .Maternal A: Child Health. WIC Section 


92 EHR 0085 


Becton 


U4 15 92 



379 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



I 



CONTESTED CASE DECISIONS 



CASE NAME 


CASE 
M VIBER 


AL.I 


FILED 
DATE 


Kurt Hafner 

V. 

N.C. Retirement System et al. 


92 DST 0094 


Gray 


03/04/92 


Margaret Coggins 

V. 

EHR, Division of Maternal & Child Health, WIC Section 


92 EHR 0095 


Becton 


04,28/92 


Roy Blalock, Deborah Eakins, John Gordon Wright 

V. 

UNC - Chapel Mill 


92 OSP 0096 


Gray 


03/13/92 


Paula Dail 

V. 

EHR, Division of Maternal & Child Health, WIC Section 


92 EHR 0098 


Becton 


04'28/92 


Youth Focus, Inc. (MID # 239-23-0865T) 

V. 

DHR, Division of .Medical Assistance 


92 DHR 0110 


Gray 


02/26/92 


Charles W. Parker 

V. 

Department of Agriculture 


92 OSP 0177 


Reilly 


04/27/92 


Brunswick County 

V. 

Department of Environment, Health, & Natural Resources 


92 EHR 0195 


Morrison 


04 21/92 


Leon Scott Wilkinson 

v. 

Criminal Justice Education & Training Standards Comm 


92 DOJ 0280 


West 


04^24/92 


Thomas L. Rogers 

V. 

DHR, Division of "i'outh Services 


92 OSP 0287 


Gray 


04 30/92 


Paul M. Fratazzi, LPN 

v. 

Polk ^'outh Institute 


92 OSP 0325 


Nesnow 


05 01,92 


Fred Henry Hampton 

V. 

Criminal Justice Education & Training Stds Comm 


92 DOJ 0393 


West 


04 23 92 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



580 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COLNT^ OF W ATALGA 



IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

91 OS P 0398 



FRED A. WII.KIE, 
Petitioner 



N.C. WILDLIFE RESOLRCES COMMISSION, 
Respondent 



RECOMMENDED DECISION 



The petitioner tiled a petition for a contested case hearing on May 6, 1991, aUegirig that the Re- 
spondent acted erroneously, failed to use proper procedure, acted arbitrarily or capriciously, or failed to 
act as required by law. The Respondent asserted in its Prehearing Statement filed on August 9, 1991, that 
it properly discharged Petitioner on .April 30, 1990, for unacceptable personal conduct. The specific in- 
stances of alleged misconduct for which he was dismissed included: (1) falsifying the hours documented 
on his weekly activity reports (2) giving false information on his location to his superior officer, and (3) 
failure to follow other directions issued by his super%'isor as established by the Division of Enforcement, 
written pohcy. The Respondent tiled on June 5. 1991, Respondents Motion to Dismiss or m the Alter- 
native for Summary Judgment. This motion was heard before Fred G. Morrison. Jr.. Administrative Law 
Judge, on September 13, 1991 and His Honor entered an Order denying the .Motion. The undersigned 
Administrative Law Judge issued a Notice of Hearing to all parties as provided by the apphcable statutes, 
rules and codes, and the matter was heard in Watauga County, beginning on December 2, 1991. 



APPEARANCES: 



Robert T. Speed. Attorney for Petitioner 

Melissa L. Tripp>e, Assistant Attorney General, Department of Justice, 

Attorney for Respondent 

ISSUES 



(A) WTiether just cause existed to dismiss Petitioner for unacceptable personnel conduct. 
(Bl ^^Tlcther Respondent followed proper procedure in dismissing Petitioner. 
STATLTES. Rl I ES AND LEGAL PRECEDENTS 

Statutes: 



(A) 
(B) 
(C) 

(D) 



Rules: 



Pohcies: 



Precedents: 



G.S. 126-1, et. seq. 
G.S. 150B-23. et. seq. 

25 NCAC IB .0100. et. seq. 

26 NCAC 3 .0001, et. seq. 



North Carolina Office of State Personnel, Personnel Manual 

North Carolina WUdlife Resources Commission. 
Policy and Procedure Manual 

Those decided under the statutes, rules, and policies set forth 
above. 

FINDINGS OF FACTS 



1. At the time of his dismissal. Petitioner was employed as a Wildlife Enforcement Officer at Pa>' Grade 
69 and had been employed by Respondent for 16 years and 2 months. 



. 



35/ 



':4 NORTH CAROLINA REGISTER May 15, 1992 



CONTESTED CASE DECISIONS 



2. The Petitioner was discharged on April 30, 1990 for alleged unacceptable personal conduct. The 
specific instances of alleged misconduct for which he had been dismissed included: falsifying the hours 
documented on his weeidy activity reports and giving false information on his location to his Supervisor. 
The Petitioner was given Respondent's written documentation of these instances during a predismissal 
conference held on April 16, 1990. 

3. Wildlife Officers worked irregular hours due to the fact that many of the violating of the laws they 
enforce take place at night. 

4. The evidence indicates Petitioner performed his duties as a WUdlife Enforcement Officer with diligence 
and enthusiasm but was not as good at doing his paperwork as he was at enforcement duties. 

5. Officers often wrote and signed reports that were not absolutely correct, in every detail, and these 
practices were known by supervisors, and sometimes directed by them because only a certain number of 
hours could be reported within a twenty-eight day period. 

6. On April 16, 1990, the Respondent, through Captam Mike Lambert, conducted a predismissal con- 
ference with Petitioner, and presented him with a written summary of the charges or contentions, entitled 
"Predismissal Conference," which were stated as the reasons for dismissal in the memo Letter of Dis- 
missal, from Colonel W. H. Ragland to the Petitioner dated April 30, 1990. 

7. The "letter of dismissal" indicates that the Petitioner was being terminated "for reasons of unaccept- 
able personal conduct" with reference to the "predismissal document dated April 16, 1990." The 
"specific" reasons for the dismissal were listed in this letter as follows: 

I. "you have fded false written reports claiming hours worked and areas patrolled when in fact you 
were not working." 

). "you gave false information on the NCWRC radio to your supervisor as to location, when in fact 
you were at your residence." 

;. "you have failed to follow other directives issued by your supervisor established by Division of 
Enforcement Written Policy." 

A letter written by Captain Mike Lambert, sets forth the tiling of false weekly activity reports re- 
garding hours worked, departure and return times, locations and being untruthful as to location when 
isked by a superior officer, and that he, the Petitioner, consistently failed to use proper radio procedure 
ifter being instructed to do so by a superior officer. 

9. The supporting evidence upon which the Respondent relies was obtained or compiled during sur- 
/eiUance of the Petitioner by other officers of the Enforcement Division of the WOdlifc Resources Com- 
nission at the direction of Captain Lambert, on March 14, 1990; March 18, 1990; March 26, 1990; March 
?0, 1990; and March 31, 1990, between 7:30 AM and 7:00 PM. 

10. The peak time of wUdlife violations mostly occur in early morning, late afternoon, and at night. 

1. This "surveillance" consisted primarily of observations of the road which leads from Highway 421 
or approximately one (1) mile to the residence of the Petitioner (State Road #1612). These observations 
)y other officers were from a location near the intersection of the "road" with Highway 421, and of the 
lepartures from and arrivals to this road. During this surveillance, radio tralTic was monitored at all times 
nd all of this information was compiled as the "supporting information which was provided at the April 
6, 1990 dismissal conference." 

2. This sun'eillance was heavily relied upon as the basis for the dismissal, and as a comparison between 
iformation contained in the Petitioner's weekly activity reports and liis actions as observed or monitored 
y radio. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 382 



CONTESTED CASE DECISIONS 



13. At the time of the "surveillance" the Petitioner held the rank of Sergeant and was responsible for the 
immediate supervision of three enforcement officers in Patrol Area 5 of District 7, which included re- 
viewing paperwork, coordinating work details, administering performance appraisal, counseling, adminis- 
tering disciphnar,' actions, and reporting to his supervisors any problems associated with wildlife law- 
enforcement in that work area. 

14. In addition to his duties as a supervisor, the Petitioner was assigned in Watauga County where there 
were no other Wildlife officers stationed or livmg in this county. As a result, it was also necessar>' that 
he accept additional duties of an enlbrcement officer. Of all the counties in the District, Watauga was the 
only one \\ ithout an enforcement officer. 

15. Respondent's witnesses did not actually obsene Petitioner at or in his residence during the specific 
periods of surveillance. 

16. Captain .Mike Lambert made the decision to consider the filing of what he considered a false report 
as "personal conduct" rather than "job performance related." 

17. Captain I^ambert says he feels that "an>nLme you're dealing with truthfulness, it's a person's conduct, 
it's not performance". 

18. In spite of his stated interpretation, W. A. Hicks, a Wildlife Officer stationed in Iredell County re- 
ceived a written warning from Captain Mike Lambert dated December 18, 1989, after it was discovered 
that he had dehberately filed reports that reduced his arrests and citations on approximately 130 of his 
weekly reports, and these actions were classified by Captain Lambert as "job performance related" and a 
warning was issued for his conduct. This action of Captain Lambert giving the warning was issued three 
months before the beginning of the surveillance of the Petitioner. 

19. Captain Lambert acknowledged in his testimony that Officer Hicks had fded many falsffied reports 
but did not recall if he had put these actions in the category of "personal conduct" or "job performance 
related", but he was under the impression that he had given Officer Hicks a written warning for the 
"conduct." However, the record showed that he had only written a warning letter for job performance. 

20. Despite the number and regularity of Offiicer Hicks' actions. Captain Lambert had considered them 
to be only inaccuracies, although the evidence was overwhelming that the action was dehberate. .Vfter 
leammg that these "inaccuracies" were dehberate falsifications, no further disciplinar\' action was taken 
and nothing in the records was changed to reflect a change in the categorv' of the falsifications from "job 
performance related" to "personal conduct." 

21. Captain Lambert never discussed any inaccuracies or discrepancies with the Petitioner at any time 
prior to either the surveillance or predismissal conference, and the Petitioner was never warned of any 
penalty or consequences for his failure to strictly adhere to the pohcy on truthfulness. 

22. Despite the f>ohcy concerning truthfulness, other otTicers in the Distnct indicated that the demands 
of the job required a form of falsilication. Officers are told by supervisors that they will work as required 
and answer all calls, but they cannot show or report more than \1\ hours per 28 day period. If an officer 
works more than 171 hours it is reported as personal time or not reported at all. 

23. Former supervisors of the Petitioner agreed that the Petitioner ga\e more attention to catching people 
violating the law than he gave to paperwork. Comments in performance evaluations indicate Petitioner 
did not pay a lot of attention to paperwork, but he was never warned that he would be dismissed for not 
accurately doing the reports. 

24. Petitioner was described as being hardworking, always available to assist officers needing help, and 
that he worked as hard or harder than most men in the district. The number of arrests made by the 
Petitioner was in the upper 25° o of the distnct, his total number of cases was higher than anyone in the 
district, and officers that he supervised were performing their duties satisfactorily. 



i83 7:4 NORTH CAROLINA REGISTER Mav 15, 1992 



I 



CONTESTED CASE DECISIONS 



25. Performance evaluations indicate that the Petitioner exceeded expectations and there were no prob- 
lems that were noted to need immediate attention. 

26. The Petitioner has never worked less than 160 hours a pay period without taking vacation time in 
that period. He acknowledged that his weekly reports may not reflect the exact hours worked, but his is 
due to the fact that his interest was in enforcing the law and he never regarded paperwork as a matter of 
high priority, but he always put in the required hours during a pay period. 

27. The Petitioner normally did his reports on Sunday night or Monday morning and did not keep daily 
notes of his activities. He frequently guessed at his hours when making out a weekly report, and the in- 
accuracies frequently included omissions of hours worked at night, as weU as the exact or particular hours 
that he did work. He denies that he has ever intentionally indicated a total number of hours that was 
more than he had actually worked during a 28 day period. 

28. The charge of giving false information to a Superior officer was apparently based upon Captain 
Lambert's interpretation of radio communications on Sunday, March 18, 1990, between Lt. Hendricks 
ind the Petitioner. The subject of the call was an injured deer in Wilkes County. 

9. When Lt. Hendricks asked the Petitioner his 10-20, (location), the Petitioner told him he was "just 
lorth of Deep Gap." Lt. Hendricks answered or handled the call. 

?0. Wildlife Officers commonly refrain from indicating their residence as their location and give the town 
nstead. This is due to the use of scanners by hunters and lack of effectiveness if the exact location of the 
fTicer is known. 

1. Captain Lambert has been observed by Lt. Hendricks and the Petitioner using this practice by stating 
lis location as Elkin when he was in fact at his residence which was three or four miles from Elkin. 

!2. Lt. Hendricks was the petitioner's supervisor at the time of this communication. His decision to 
landle the call was not based upon the location given by the Petitioner. He was only interested in 
:nowing if the Petitioner was in Wilkes County, and if the Petitioner had told him he was at his residence 
le "still would have handled the call." 

3. Lt. Hendricks has often witnessed officers giving locations other than their home when asked their 
ocation over the radio. 

/Mthough the Respondent has established a poUcy requiring officers to use the ten signals whenever 
ising their radios, it appears that officers in District 7 and other areas have deviated from tliis pohcy 
egularly and without consequence. 

5. The use of portable (Saber) radios made it unnecessary to use the 10-7 and 10-8 codes as often since 
[icy made it possible to monitor radio traffic even when out of the officers vehicle. 

The testimony of officers Patrick Hendricks, Hicks, Lewis, Thomas and Petitioner indicated that 
dead spots" exist where an officer cannot send or receive radio signals in several areas within District 7, 
nd much of Watauga County is affected by this problem. Dead Spots in Watauga County include from 
Soone West to the Tennessee line and from the Watauga River to Avery County. 

Captain Lambert had been assigned to District 7 since October 1, 1989, and the Captain of this 
)istrict before that time had mstructed officers not to use the 10-7 and 10-8 codes as frequently because 
fficers should not let the pubhc know where they are. 

8. Subsequent to the surveillance and the compiling of information by Captain Lambert and Lt. 
eQuire, Lt. Hendricks was called to the Raleigh Office on April 6, 1990 for the purpose of his own 
redismissal conference. He had been there for about an hour and a half when Captain Lambert gave 
im the infomiation concerning Petitioner. Prior to that time, Lt. Hendricks had no knowledge of the 
irveillance or disciphnan,' action, even though he was the Petitioner's immediate supervisor. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 384 



CONTESTED CASE DECISIONS 



39. Lt. Hendricks felt pressured to recommend dismissal of Petitioner because he had been told what a 
"sorrv" super\isor he was and he was there for his own predismissal conference, and he had been told that 
Captain Lambert and Colonel Ragland would recommend a dismissal of Petitioner. Therefore, he felt 
pressured to make a like recommendation. 

40. Prior to this predismissal hearing in Raleigh, North Carolina, Lt. Hendricks had been told on nu- 
merous occasions by Captain Lambert that he "was in a lot of trouble" and "it looked like he was going 
to lose his job." 

41. At the time of the predismissal conference on April 16, 1990, the Petitioner had not been informed 
of the reason that he was instructed to report to the Highway Patrol Station in Elkin on that date; and 
he had no knowledge of any charges against him. 

Based on the foregoing Findings of Fact, the Administrative Law Judge makes the following: 

CONCLUSIONS OF VXW 

1. Fred A. VVilkie, Petitioner was a permanent State employee at the time of his dismissal. Because 
he has aOeged that Respondent lacked just cause for his dismissal, the Office of Administrative 
Hearings has jurisdiction to hear his appeal and issue a recommendation to the State Persormel 
Commission which shall make the fmal decision in the matter. G.S. 126-35, 126-37, 126-39, 
1508-23 and 150B-36. 

2. General Statute 126-35 provides, in part, "that no permanent employee subject to the State Per- 
sonnel Act shall be dismissed except for just cause." WTiere just cause is an issue, the Respondent 
bears the ultimate burden of f>ersuasion. A just cause issue carries both substantive and procedural 
questions. Causes for dismissal fall into two categories: (I) causes relating to performance of duties, 
and (2) causes relating to personal conduct detrimental to state service -- no prior warnings are re- 
quired under (2). 

3. In Jones v. Department of Human Resources, 300 NC 690, 691, (1980), the Supreme Court of 
North Carolina held that "prior dismissal for causes relating to performance of duties, a permanent 
State employee is entitled to three separate warnings that his performance is unsatisfactor}'. He 
must receive: (1) An oral warning explaining how he is not meeting the job's requirements: (2) a 
second oral warning outlining his unsatisfactory performance with a foUow-up letter reviewing the 
points covered by the oral warning; (3) a third and fmal written warning setting forth in numerical 
order the specific acts or omissions that are the reasons for the disciplinan,' action." 

4. Respondent has not met its burden of showing just cause for terminating Petitioner's employment. 
Petitioner did not receive the required number of warnings prior to being dismissed for what 
amounted, if an\lhing, to inadequate job performance. Respondent never warned Petitioner about 
any of the alleged unsatisfactory" job performance. 

RECOMMENDED DFCISION 

The Petitioner's dismissal be re%'ersed and that he be reinstated and awarded back pay as well as at- 
tomev s fees. 

ORDER 

The agency making the final decision in this contested case is required to gi\e each party an oppor- 
tunity to file exceptions to this recommended decision and to present written arguments to those in the 
agency who will make the fmal decision. G.S. 150B-36(a). 

The agency is required by G.S. 150B-36(bl to ser\'e a copy of the final decision on aU parties and to 
furnish a copy to the parties' attorney of record and to the OtTice of .Administrative Hearings. 

The aaencv that will make the fmal decision in this contested case is the State Personnel Commission 



iS5 7:4 NORTH CAROLINA REGISTER May 15, 1992 



k 



CONTESTED CASE DECISIONS 



This the 20th day of April, 1992. 



Sammie Chess, Jr. 
Administrative Law Judge 



7:4 NORTH CAROLINA REGISTER Mav 15, 1992 386 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COLNTV OF DLRMAM 



IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

91 DHR 1411 



BILL JONES JR. AND JESSIE F. JONES, 
Petitioner 



N.C. DEPARTMENT OF HUMAN RESOURCES, 
Respondent 




The abo\e-captioned matter was heard before Dolores O. Nesnow, duly-appointed Administrative 
Law Judge, on April 9, 1992, in Durham, North Carolina. 

APPEARANCES 

Petitioner: Bill and Jessie Jones 

2408 N. Oakridge Boulevard 
Durham, North Carolina 27707 
Petitioners 

Respondent: CHane G. Miller 

Associate Attorney General 

N.C. Department of Justice 

225 Green Street 

Suite 904B 

Fayetteville, North Carolina 28301 

Attorney for Respondent 

STATUTES AND RILES IN ISSUE 

N.C. Gen. Stat. 131D, .Article lA 
N.C. Admin Code, tit 10, subchapters 41 A and 41 F 

ISSUE 

Did Respondent err in revoking Petitioners' foster home Hcense on grounds of child neglect? 

Based upon careful consideration of the testunony and e\'idence presented at the hearing, the docu- 
ments and exhibits received into evidence, and the entire record in this proceedmg, the undersigned makes 
the following: 

FINDlNCiS OF FACT 

1. Petitioners hold a foster home hcense issued h\ the Respondent. 

2. On October 19, 1990, a representati\e of the Respondent agency contacted Mrs. Jones and stated 
that there were two children who were in an emergency situation and had to be placed in a home before 
the end of the day. 

3. Mrs. Jones agreed to accept the children and they were brought to her home. 

4. The children were Danielle Dorty. bom December 24, 1987, and Demarcus Dorty, bom March 
8, 1989. At the time the children were brought to Petitioners' home, Danielle was three years of age and 
Demarcus was two years of age. 



i8' 



7:4 NORTH CAROLINA REGISTER May 15, 1992 



CONTESTED CASE DECISIONS 



5. When the children were brought to Petitioners' home the social worker said that she did not have 
any history to report to Petitioners. The children's older sister was present and told Petitioners that the 
boy (Demarcus) did not drink a "bottle." 

6. Petitioners had another foster baby in their home who was stiU drinking from a "bottle" and 
Mrs. Jones observed Demarcus trying to take the bottle from the baby. She sent her husband to the store 
to buy a bottle for Demarcus. 

7. She filled the bottle with milk and Demarcus drank it straight down. She tried to remove the 
'bottle" at one point so Demarcus would catch his breath, but he cried and puUed it back. He fmished 

the bottle and thereafter whenever she gave him a "bottle", he drank it straight down until it was fmished. 

8. When the children were fu-st dropped off, the social worker said that she had bought them Happy 
Meals from McDonalds. After the social worker left. Petitioner observed that the children appeared to 
be hungry. She fed them fried chicken and they ate voraciously. 

9. During the time the children were with Petitioners, they observed that they ate enormous 
amounts of food. They would usually eat a full plate and then a second full plate of food. 

10. On three occasions the children ate until they threw up. 

11. At one time Petitioner called her "license worker", Annette Bailey, and asked her to come to the 
lome and observe the children. Ms. Bailey did so, but no action was taken. 

12. At some point Petitioner observed that DanieUe was sexually acting out. Petitioner called the 
lOcial worker and was advised to take DanieUe to Dr. Sinclair, a local pediatrician. 

13. Dr. Sinclair saw Danielle on several occasions while she was in the Petitioners' care. 

14. On another occasion Petitioners obser\'ed that Danielle had vaginal bleeding. Mrs. Jones called 
Dr. Sinclair and Dr. Sinclair called a prescription in to the drug store which Petitioner picked up and 
idministered to Danielle. The medication, which Petitioner could not identify, stopped the bleeding. 

15. Petitioner reported to the social workers and to Dr. Sinclair that the children ate an inordinate 
imount of food and that they ate as if they were famished. 

16. In February of 1991, Petitioner again brought Danielle to see Dr. Sinclair. Dr. Sinclair deter- 
nined that Danielle was losing weight and admitted her to Duke's Children's Hospital. 

17. In June of 1990, prior to being placed at Petitioners' home, Danielle weighed 30-1/4 pounds, 
^rior to being placed in Petitioners' home, Danielle's weight had dropped to 27-1/2 pounds. 

18. In December of 1990, after Danielle had been with Petitioners for approximately two months, 
Danielle had lost 1/2 pound and weighed 27 pounds. 

19. Prior to being sent to Petitioners' home, Demarcus weighed 22-1/5 pounds. On December 3rd 
)f 1990, Demarcus weighed 18-1/2 pounds. 

20. In February of 1991, at the time Dr. Sinclair decided to admit Danielle to the hospital, Danielle 
veighed 24 pounds. 

21. After Dr. Sinclair had admitted Danielle to the hospital she asked to see Demarcus. 

22. When Dr. Sinclair saw Demarcus in February' of 1991, he weighed 18.7 pounds. She decided 
o admit him to the hospital and during his stay Demarcus gained approximately 1-1/2 pounds. He left 
he hospital weighing 20.35 pounds. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 388 



CONTESTED CASE DECISIONS 



23. Danielle remained in the hospital for about three weeks and during that time she gained 8 
pounds, weighing 32 pounds when she left the hospital. 

24. After Danielle left the hospital, she was weighed on March 13 of 1991 and had lost 1/3 of a 
pound. 

25. When the children were released from the hospital they were not returned to Petitioners' home. 

26. /Vlthough Danielle was supposed to be weighed in at a clinic on a weekly basis, she was not 
weighed again until June. 

27. When Danielle was next weighed on June 24, 1991, she had lost another pound, weighing 30-2/3 
pounds. 

28. DanieUe's records indicate that another weight was taken in August of 1991 at which time she 
weighed 31 pounds. 

29. Her record also indicates that she was weighed in January of 1992 at which time she weighed 
35 pounds. 

30. Danielle had an extensi\e medical record. She had had surgery as an infant due to a cyst on 
her o\ary. She also suffered from hirsutism, or excess hair growth. 

31. Hirsutism is the presence of excessive body and facial hair, in a male pattern, especially in 
women. It may be present m normal adults as an expression of an ethnic charactenstic or may develop 
in children or adults as the result of a metabolic disorder, usually endocrme in nature. Idiopathic 
hirsutism is of uncertain origin in women, who may additionally e.xhibit menstrual abnormalities and 
sterilitv. It may reflect hypersecretion of adrenocortical androgens. (STEDMAN'S MEDICAL DIC- 
TIONARY' 25th Edition lUustrated, Page 717). 

32. It was also suspected that Danielle had been the victim of sexual abuse. 

33. Gail Lankford, who is a Child Protective Service In\estigator with Wake County, was asked to 
do an investigation on Februar>- 28, 1991. 

34. During their stay at the hospital, the children were not fed through a feeding tube. 

35. The children were put on a 2000 caione per day diet. 

36. Although Mrs. Lankford does not know what tests were done on the children, she testified that 
the doctors reported that there was no lack of any particular \itamin or element, no diarrhea, and no other 
e\idence of organic disease. 

37. Ms. Lankford testiiied that the doctors she interviewed stated that there was no explanation for 
the children's weight loss except that Petitioners were not gi\ing them enough food, particularly in light 
of the fact that the children gained weight while they were in the hospital. 

38. None of the doctors testified at the hearing. 

39. Petitioner testified that she had made phone calls to the social workers expressmg concerns about 
the children but no one had told her what to do. 

40. \Is. Lankford inter\'iewed Petitioner twice and found her to be cooperative, pleasant, and cred- 
ible. 

41. Petitioner also told Ms. Lankford that the children ate two platefuls at ever)' meal and ate three 
meals and three snacks each dav. 



.^<99 7:4 NORTH CAROLINA REGISTER May 15, 1992 



CONTESTED CASE DECISIONS 



42. Ms. Lankford sought another opinion and sent some of the children's records to Dr. Desmond 
Runyon, a Pediatrician at University of North Carolina at Chapel Hill. 

43. Dr. Runyon reviewed the partial records including a height and weight summary, Ms. Lankford's 
"dictation", and team notes from the Child Medical Evaluation team at Duke. 

44. Dr. Runyon concluded that the documents he saw indicated no evidence of underlying organic 
disease and stated that "the fmal common pathway to failure to tlirive is lack of calories." He also stated 
that the records appear to be "pretty damning of the foster home." 

45. Dr. Runyon's letter, written on June 17, 1991, stated that the children had gained weight during 
their hospital stay and that "the children have been well since." 

46. /Vlthough Danielle's weight increased to 35 pounds by January of 1992, she did not grow in 
height between October of 1990 and January of 1992. 

47. Dr. Runyon did not testify at the hearing. 

48. Ms. Lankford testified that the hospital record, wliich was not introduced at the hearing, indi- 
cates that the children ate without stopping during their hospitalization. 

49. Both children are small in stature and developmentally delayed. In 1991, Danielle was below 
the 10th percentile on the children's growth chart and Demarcus was below the 5th percentile. 

50. Other than endocrine tests for Danielle's hirsutism, Ms. Lankford is not aware of what tests, 
if any, were performed during Danielle's hospitalization. 

51. Ms. Lankford understands that the children were taking nourishment by mouth during their 
hospital stay, but does not know if any nourishment supplements were given to the children in addition 
to their meals. 

52. Petitioner's neighbor. Ethyl May Clegg, testified that she saw the children at Petitioner's home 
and observed them eating an enormous amount of food. She further testified that the children looked 
undernourished. 

53. Marian Gordon, Petitioner's friend and a Nursing Care Assistant at Duke, testified that she saw 
the children at Petitioner's home and stated at that time that there was "something wrong with them." 
She also observed them at a church reception where they "ate hke pigs." At that reception, Ms. Gordon 
told Petitioner, "\'ou'd better stop them." Ms. Gordon also saw the children on subsequent occasions 
at the Petitioner's home and stated, "I can't eat as much as they did." She further testified that she could 
not believe DanicUe was three years old because she was "always little." 

54. Tanzy McNair, another friend of Petitioner, testified that she saw the children at Petitioner's 
home. She stated that the girl was small for her age and "not normal" because she was developmentally 
delayed. She stated that they ate a lot and wanted more. She testified that they ate "so much food and 
they were so httle." She testified that Petitioner and her grandchildren treated the Dorty children well. 

55. Petitioner's daughter, /Vhcia Pierce, testified that she was there the day the children were brought 
to Petitioner's home. She testified that they were very scared and that her mother gave them a bath, fixed 
them food, and asked Ahcia to take them to the store for clothes. She testified that Danielle had a vaginal 
discharge and was bleeding when she went to the bathroom. She stated that the children ate large 
quantities of food and ne\-er refused an>1hing. 

56. Patricia Pegues, who was at one time the Durham County Social Worker assigned to Petitioner, 
estified that Petitioners kept Ms. Pegues' baby for 2-1/2 years and had a good nurturing abihty. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 390 



CONTESTED CASE DECISIONS 



57. She testified that Petitioners had accepted a baby boy at one point in time who had a feeding 
tube. Petitioners took good care of the boy and eventually convinced the doctors to remove the tube and 
allow them to feed the boy normally. The tube was removed and the boy did well on regular meals. 

58. Janice Williams, who was the social worker who conducted training when Petitioners first re- 
ceived their foster care license, testified that many children who are in need of foster homes have eating 
problems and that that is part of the training curriculum. She testified that children who are the victims 
of abuse or neglect often eat lots of food. 

59. She further testified that Petitioners' family are all o\'crweight and that Petitioners have a home 
situation where Mrs. Jones cooks regularly and has a great deal of food available. 

60. Ms. Williams testified that she placed the boy in the Petitioners' home who was on a feeding 
tube. She stated that Petitioner visited the boy in the hospital before he was placed in her home and 
learned how to feed him through the tube. The boy was released from the hospital into Petitioners' care. 
Ms. Williams testified that she believed that if Petitioner were given any special instructions on feeding 
the Dorty children she would have followed those instructions. 

61. The children have been in two foster homes since they were moved from Petitioners' home and 
both new foster parents have reported to the children s Child Service Coordinator that the children just 
do not stop eating. 

62. Ms. Jones testified that she does not know why the children gained weight while they were at 
Duke. 

63. /Vfter the investigation was complete, Ms. Lankford substantiated neglect against the Petitioners 
based upon the doctors' opinions. 

64. Petitioner's foster care license was revoked. 

Based on the foregoing Findings of Fact, the undersigned makes the following: 

CONCIT SIONS OF 1 AW 

1. The facts are uncontested that the children were dcvelopmentally delayed, small in size, that 
Danielle had problems with vaginal bleeding, suffered from hirsutism, and that both children had aberrant 
eating habits. The facts also indicate that Danielle lost weight before she came into Petitioners' home 
and that she lost some weight after she was released from the hospital. The facts indicate that Danielle 
weighed 32 pounds upon her release from the hospital in March of 1991 and that in January of 1992, ten 
months later, she had gained only three pounds and had not grown at all in height. 

The Respondent, of course, was not aware of facts and information which would occur subsequent 
to their decision to revoke. 

The revocation of Petitioners' license was based solely on the opinion of the doctors. Ms. Lankford 
did not have familiarity with medical procedures and could not report what tests were done or whether 
or not any food supplements were administered during the hospital stay. None of the doctors were 
present to testify. '^N'ithout the presence of the doctors, there could be no questioning concerning what 
facts they knew or did not know, what tests were performed, what happened during the hospitalization, 
or any other information upon which they may have based their conclusions. It is unknown, for example, 
whether the doctors observed the children's eating behavior and believed it to be caused by hunger or by 
an eating disorder. 

WTiile Ms. Lankford may have felt obliged to defer to the doctors' opinions, the facts do not indicate 
with any speciticity exactly what the doctors reported or upon what tests and information they based their 
opinions. 



.?9/ 7:4 NORTH CAROLINA REGISTER May 15, 1992 



CONTESTED CASE DECISIONS 



Dr. Runyon's opinion was presented in the form of a letter but was based upon partial files which 
were submitted to him. Dr. Runyon never saw nor examined the children. 

Respondent presented no evidence, other than the hearsay evidence of doctors' opinions, which 
would indicate that Petitioners withheld food from the children. 

Petitioners presented much direct evidence to indicate that they were good foster parents and did not 
withhold food from the children. 

The facts strongly indicate that Petitioners were good foster parents and offered their foster children 
a lot of attention and care. While they may not have provided the Dorty children with particular or 
specialized diets or dietary supplements, it is concluded that they did not keep food from the cluldren ei- 
ther intentionally or unintentionally. 

2. The Respondent has not met its burden of proof that the revocation of Petitioners' foster home 
license was proper. 

Based upon the above Conclusions of Law, the undersigned makes the following: 

R^:co\l\1^:^DATlON 

That Respondent's decision to revoke Petitioners' foster home license be reversed. 

ORDER 

It is hereby ordered that the agency serve a copy of the fmal decision on the Office of Administrative 
Hearings, P.O. Drawer 27447, Raleigh, N.C. 27611-7447, in accordance with North Carolina General 

Statute l50B-36(b). 

NOTICE 

The agency making the final decision in this contested case is required to give each party an oppor- 
tunity to file exceptions to this recommended decision and to present written arguments to those in the 
igency who will make the fmal decision. G.S. 150B-36(a). 

The agency is required by G.S. 150B-36(b) to serve a copy of the final decision on aU parties and to 
umish a copy to the parties' attorney of record and to the Office of Administrative I learings. 

The agency that will make the final decision in this contested case is the North Carolina Department 
5f Human Resources 

This the 1st day of May, 1992. 



Dolores O. Nesnow 
Administrative law Judge 



7:4 NORTH CAROLINA REGISTER May 15, 1992 392 



CONTESTED CASE DECISIONS 



STATE OF NORTH CAROLINA 
COUNTY OF PITT 



IN THE OFFICE OF 

ADMINISTRATIVE HEARINGS 

92 EUR 0098 



PALLA DAIL, 

Petitioner 



N.C. DEPARTMENT OF EN\ IRONMENT, 
HEALTH, AND NATURAL RESOURCES, 
DIMSION OF MATERNAL AND CHILD 
HEALTH, \MC SECTION, 

Respondent. 




This matter was heard before Brenda B. Becton. Administrative Law Judge, on March 2, 1992, in 
Green\'ille. North Carolina. At the conclusion of the hearing, the parties exercised their right to file 
written submissions as provided for in North Carolina General Statutes section 150B-34(b). The record 
was closed on March 16, 1992. 

APPEARANCES 



Petiti 



Pro se. 



Respondent: Belinda .A. Smith, Associate Attorney General. North Carolina Department of Justice, 
Raleigh, North Carolina. 

ISSUES 

1. Whether the Petitioner, or her employee, provided cash for WIC food instruments on or about 
October 21. 1991, in violation of Title 15A, Chapter 2 ID, section .0706(bj(9) of the North Carohna Ad- 
ministrati\e Code. 

2. Whether the Petitioner, or her employee, charged a WIC compliance buyer more than the current 
shelf price for WIC-approved foods in violation of Title 15.A, Chapter 2 ID. section .0706(b)(1) and (4) 
of the North Carolina Administrative Code on or about October S, 1991 and October 21, 1991. 

3. Whether the Petitioner, or her employee, failed to properly redeem W'lC food instruments by not 
completing the date and purchase price on the food instruments before obtaining the participant's signa- 
ture in violation of Title 15A. Chapter 21D, section .0706(b)(1), (3). (4), and (6) of the North Carolina 
AdministratiNe Code on or about October 8, 1991 and October 21, 1991. 

4. Whether the Petitioner should be disqualified from participating as an authorized WIC \endor in 
the L'SDA Food Stamp Program. 

EXHIBITS 

The following exhibits offered b\' the Respondent were admitted in evidence: 
Rl. N.C. WIC \'endor Agreement between Paula Dail and Pitt County dated .May 30. 1991. 

N.C. WIC \'endor .Application signed by Paula Dail for Doc's Store and dated May 30. 1991. 
WIC Price List completed by Paula Dail and dated May 22, 1991. 



393 



NORTH CAROLINA REGISTER Mav 15, 1992 



ta 



CONTESTED CASE DECISIONS 



R2. VVIC Compliance Buy Investigation Report dated October 8, 1991. 

R3. WIC Compliance Buy Investigation Report dated October 21, 1991. 

R4. WIC Cash Buy Compliance Investigation Report dated October 8, 1991. 

R5. WIC Cash Buy Compliance Investigation Report dated October 21, 1991. 

R6. Notice of Intent to Disqualify letter dated January 24, 1992. 

R7. North Carolina WIC Vendor Manual, Revised June 1991. 

R8. Attendance Record for Vendor Training 1991. 

FINDINGS OF FACT 

From official documents in the file, sworn testimony of the witnesses, and other competent and ad- 
nissible evidence, it is found as a fact that: 

1. The Petitioner is the owner of a convenience store located in Wintervdle, North Carolina known 
as Doc's Store. Pursuant to a WIC Vendor Agreement signed by the Petitioner on May 30, 1991, 
she is an authorized WIC vendor, holding stamp number 4846. 

2. "WIC" is an acronym for 'Women, Infants, and Children." The purpose of the WIC program is 
to provide supplemental foods and nutrition education to low income pregnant women, infants, 
and children up to age five, who are at nutritional risk. 

3. The WIC program is federally funded and administered in North Carolina by the Department of 
Envirormient, Health, and Natural Resources, Division of .Maternal and Child Health. 

4. WIC foods are supplied to participants through the retail grocery' system via food instruments. 
People who are served by the WIC program receive food instruments from a local Community 
Health Center. The instruments list specific foods that are deemed necessary for the health of the 
pregnant woman and her unborn child, and any children under age five. The instruments list the 
participants name, a date of issue, a date by which the instrument must be used, a blank where the 
vendor can write the date the instrument is redeemed, a maximum amount the instrument can be 
used for--denoted as "void if exceeds," and requires the vendor to fill in a "pay exactly" box with 
the actual cash price of the purchased foods. 

5. The WIC program contracts with vendors to accept WIC food instruments in exchange for sup- 
plemental foods provided to the participants. Wlien a person served by WIC presents the food 
instrument and the foods hsted on it to a WIC vendor, the vendor is required by law to ring up 
the transaction on its register, enter the price of the purchased goods on the food instrument, and 
obtain the signature of the person listed on the instrument. A vendor may fill a voucher partially, 
only in the participant's discretion, and a vendor may not issue a raincheck if the vendor does not 
have all of the items Ustcd in stock. 

6. The Petitioner signed a WIC Vendor Agreement which sets forth all of the terms by which a vendor 

is required to abide. 

7. Procedures for proper vendor redemption of food instruments are taught in the annual vendor 
traimng sessions. The last vendor training session in the Greenville area was conducted by Celia 
Witt, Pitt County WIC Director, on May 7, 14 and 23, 1991. Besides presenting information re- 
garding WIC procedures and regulations, the program specifically included a discussion of actions 
which constitute serious violations of the WIC mles. A representative from the Petitioner's store 
attended the training session held on May 7, 1991 and received a copy of the North Carolina WIC 
Vendor Manual which contains directions and requirements for proper food instrument redemp- 
tion. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 394 



CONTESTED CASE DECISIONS 



8. The petitioner signed a WIC Price List on May 22, 1991 which lists the current highest price for 
WIC-eligible foods sold by the Petitioner's store. 

9. "To overcharge" means to charge the State agency more for supplemental foods than other cus- 
tomers are charged for the same foods. 

10. The Respondent initiated an investigation of the Petitioner's store because of concern generated 
by data it received regarding the Petitioner's WIC instrument redemption pattem. 

1 1. On or about October 8, 1991, Sheila Davis, a WIC compliance investigator, entered the Petitioner's 
store posing as a WIC participant for the purpose of purchasing foods hsted on a WIC food in- 
strument in order to check compliance with the laws governing the WIC program. 

12. Ms. Davis used food instrument number 01862543 which had a "void if exceeds" value of $25.00 
to purchase one (1) gallon of Carolina Dairies milk; two (2) boxes of Country Com Flakes cereal; 
and one (1) pound of hoop cheddar cheese. None of the items was marked with a price. 

13. The clerk, Paula Dail, did not write the date or the purchase price on the food instrument before 
obtaining Ms. Davis' signature on October 8, 1991. 

14. On October 8, 1991, WIC Comphance Investigator, Audrey Bamett, visited the Petitioner's store 
and purchased one (1) gallon of Carohna Dairies mUk, one (1) box of Countr>' Com Flakes, and 
one (1) pound of hoop cheddar cheese and was charged $9.09. 

15. Based upon the Petitioner's WIC price Ust and a cash buy done by Audrey Bamett, the approxi- 
mate actual price of the items purchased by Ms. Davis with WIC food instrument number 
01862543 was $12.96. 

16. The Petitioner redeemed food instrument number 01862543 for $15.85. 

17. On October 8, 1991, the Petitioner charged the WIC Program more than the current shelf price 
for the items purchased with a WIC food instrument. 

18. On October 21, 1991, Ms. Davis returned to the Petitioner's store, again in an undercover capacity, 
to buy food with two WIC food instruments. On this occasion, with food instrument number 
01862545, which had a "void if e.xceeds" value of $16.00, she purchased two (2) 46 ounce cans of 
Golden Tap orange juice and one (1) 12 ounce jar of Roddenberry peanut butter. 

19. The cans of Golden tap orange juice were unmarked. The price listed on the Petitioner's WIC 
Price List for 46 ounce cans of juice is $1.99. The twelve ounce jar of peanut butter, which is an 
ineligible item, was marked with the price of $1.09. The actual price of all items purchased was 
$5.07. The Petitioner redeemed food instrument 0862545 for $1 1.47. 

20. On October 21, 1991, Ms. Davis used a second food mstrument, number 01862533, with a "void 
if exceeds" value of $25.00 to purchase two 46 ounce cans of Golden Tap orange juice, one box 
of Countn' Com Flakes cereal, and one pound of cheese. 

21. The clerk who waited on Ms. Davis on October 21, 1991, identilied at the hearing as Mr. Stotts, 
did not complete the date or the purchase price on the food instruments before obtaining .Ms. 
Davis' signature. 

22. Mr. Stotts provided Ms. Davis with $7.00 in cash after he totalled the amount of her purchase on 
calculator. 

23. According to the Petitioner's WIC Price List, the total price of the items purchased with food in- 
strument number 01862533 should have been $10.85. The Petitioner redeemed food instmment 
number 0186533 in the amount of $19.83. 



i95 7:4 NORTH CAROLINA REGISTER May 15. 1992 



CONTESTED CASE DECISIONS 



24. On October 21, 1991, WIC Compliance Investigator Audrey Bamett purchased one box of 
Countp, Com Flakes, one gallon of Carolina Daines milk, one pound of cheese, one 46 ounce can 
of Golden Tap Orange juice and was charged J 11.00. According to the Petitioner's WIC Price 
List, the cost of the items purchased by Bamett should have been $12.06 plus $.72 tax. 

25. On October 21, 19^1, the Petitioner charged the WIC Program more than the current shelf price 
for the items purchased with WIC food instmments. 

26. On January 24, 1992, the WIC Program notified the Petitioner by letter, sent certified mail, of its 
intent to disqualify him from participation in the WIC Program. The Petitioner fded a petition 
for a contested case hearing on February 4, 1992. 

27. The Petitioner's store is located in a mral area of Pitt County. 

28. There is an authorized WIC vendor in good standing located within six miles of the Petitioner in 
Farmville, and a second vendor is located within eight miles of the Petitioner in Greenville. 

29. Terry Bland, a WIC participant, testified that the disqualification of the Petitioner's store would 
result in a hardship to her because she already has to pay someone to drive her to the store, and 
she would have to pay four dollars more to get someone to drive her to Greenville. 

30. Terry Bland also testified that the Petitioner partially fills WIC food instruments for her when the 
store does not have all of the prescribed items in stock. The Petitioner allows Ms. Bland to return 
at a later time to fmish fdling her WIC food instmments. 

31. The issuance of rainchecks is specifically prohibited by 15A NCAC 21 D .0706(e)(l)(C)(iii). 

32. Pauline Stocks, a WIC participant, testified that she has been in the Petitioner's store and seen 
other WIC participants who have walked to the store come in to purchase food with WIC 
vouchers. .Vis. Stocks also testified that the Petitioner has deUvered groceries to her home on oc- 
casions when she has been unable to leave her house. 

33. Disqualification of the Petitioner from the WIC Program may result in an inconvenience to some 
participants and in some participant hardship. 

34. Title IS.A., Chapter 2 ID, subsection .0706(e) of the North Carolina Administrative Code sets out 
a point system for sanctioning vendors for violations of the WIC Program's regulations. Under 
the system established in subsection .0706(e), if a vendor accumulates fifteen (15) or more points, 
the vendor is to be disqualified from participation in the Program. The period of disquahfication 
is calculated using the following formula: number of points of the worst offense multiplied by 
eighteen ( 18) days. Fighteen days shall be added to the disquahfication period for each point over 
fifteen (15) points. Points accumulated remain on the vendor's record for a period of one year 
or until the vendor is disqualified as a result of those points. 

35. The violation of providing cash for WIC food instmments carries a penalty value of twenty (20) 
sanction points; the violation of charging more than the current shelf price for WIC-approved 
foods carries a value of fifteen ( 1 5) sanction points; the violation of failing to properly redeem WIC 
food instmments carries a value of seven and one-half (7.5) sanction points. 

Based on the foregoing Findings of Fact, the undersigned Administrative Law Judge makes the fol- 
wing: 

CONri.l SIGNS OF l,\W 



The Petitioner is an authorized WIC \cndor bound by the terms of the WIC Vendor Agreement 
signed by her and the administrative mlcs and laws regulating the WIC program. 



7:4 NORTH CAROLINA REGISTER May 15, 1992 396 



CONTESTED CASE DECISIONS 



1. 



The North Carolina WIC Program is %'ested with the authority to authorize and disqualify WIC 
vendors pursuant to North Carolina General Statutes section 130A-361 and Title 15A, Chapter 
21 D of the North Carolina Administrative Code. 

The Petitioner violated 15A NCAC 21 D .0706(e)(l)(C)(i) by failing to properly redeem WIC food 
instruments on October 8, 1991 and October 21, 1991. 

The Petitioner violated 15A NCAC 21 D .0706(e)(l)(D)(i) by charging more than the current shelf 
price for WIC-approved foods on October 8. 1991 and October 21, 1991. 

The Petitioner violated 15A NCAC 21D .0706(e)(l)(E)(i) by providing cash for WIC food instru- 
ments on October 21, 1991. 



6. Pursuant to the regulator}' scheme set forth at 15A NCAC 21 D .0700, the violations are worth 65 

points. Accordingly, it is within the Respondent's authority to disqualify the Petitioner from 
participation as a WIC vendor for a period of three (3) years, the maximum authorized by 7 C.F.R. 
§24612(k)(ii) and 15A NCAC 21 D .0706(e). 

7. The Petitioner's disqualification as a WIC vendor may result in some participant hardship. How- 

ever, the seriousness of the violations warrants the Petitioner's disqualification despite the possi- 
bility of participant hardsliip. 

RF.COMMKNDF.n Dh.CISION 

The Department of Environment, Health, and Natural Resources will make the Final Decision in 
tliis contested case. It is recommended that Agency adopt the Findings of Fact and Conclusions of Law 
set forth above and that the Petitioner be disqualified from participating in the WIC Program as an au 
thorized vendor for a period of three (3) years. 

NOTICE 

Before the Department of linvironment. Health and Natural Resources makes the FINAL DECI 
SION, it is required by North Carolina General Statutes section 150B-36(a) to give each party an oppor 
tunity to file exceptions to this RECOMMENDFD DECISION, and to present written arguments to those 
in the agency who will make the fmal decision. 

The agency is required by North Carolina General Statutes section 150B-36(b) to ser\'e a copy of the 
final decision on all parties and to furnish a copy to the parties' attorney of record and to the Office of 
Administrati\c Hearings. 

This the 2Sth day of April, 1992. 



Brenda B. Becton 
Administrative Law Judge 



i97 7:4 NORTH CAROLINA REGISTER May 15, 1992 



^ 



NORTH CAROLINA ADMINISTRA TIVE CODE CLASSIFICA TION SYSTEM 


1 he North Carolina Administrative Code (NCAC) has four major subdivisions of rules. 


Two of 


these, 


titles and chapters, are mandatory. The major subdivision of the NCAC is the title. 


Each 


major 


department in the North Carolina executive branch of government has been assigned 


a title 


number. Titles are further broken down into chapters which shall be numerical in order. The other 


two, subchapters and sections are optional subdivisions to be used by agencies when appropriate. 


TITLE/AIAJOR DFV ISIONS OF THE NORTH CAROLPSA ADMINISTRATrV E CODE 


TITLE 


DEPARTMENT 


LICENSrVG BOARDS CHAPTER 


1 


Administration 


Architecture 


2 


2 


Agriculture 


Auctioneers 


4 


3 


Auditor 


Barber Examiners 


6 


4 


Economic and Community 


Certified Public Accountant Examiners 


8 




Development 


Chiropractic Examiners 


10 


5 


Correction 


General Contractors 


12 


6 


Council of State 


Cosmetic Art Examiners 


14 


7 


Cultural Resources 


Dental Examiners 


16 


8 


Elections 


Dietetics Nutrition 


17 


9 


Governor 


Electrical Contractors 


18 


10 


Human Resources 


Electrolysis 


19 


11 


Insurance 


Foresters 


20 


12 


Justice 


Geologists 


21 


13 


Labor 


Hearing ,\id Dealers and Fitters 


22 


14A 


Crime Control and Public Safety 


landscape /\rchitects 


26 


15A 


Environment, Health, and Natural 


landscape Contractors 


28 




Resources 


Martial & Family Therapy 


31 


16 


Public Education 


Medical Examiners 


32 


17 


Revenue 


Midwifery' Joint Committee 


33 


18 


Secretary of State 


Mortuar>' Science 


34 


19A 


Transportation 


Nursing 


36 


20 


Treasurer 


Nursing I lome Administrators 


37 


*21 


Occupational Licensing Boards 


Occupational Therapists 


38 


22 


Administrative Procedures 


Opticians 


40 


23 


Community Colleges 


Optometry 


42 . 


24 


Independent Agencies 


Osteopathic Examination and 


44 


25 


State Personnel 


Registration (Repealed) 




26 


Administrative Hearings 


Pharmacy 


46 






Physical Therapy Examiners 


48 






Plumbing, Heating and Fire Sprinkler 


50 






Contractors 








Podiatr>' Examiners 


52 






Practicing Counselors 


53 






Practicing Psychologists 


54 






Professional Engineers and Land Sur\cyon 


, 56 






Real Estate Commission 


58 






Refrigeration Examiners 


60 






Sanitarian Examiners 


62 






Social Work 


63 






Speech and Language Pathologists and 


64 






Audiologists 








Veterinarv' Medical Board 


66 


Note: Title 2 1 contains the chapters of the varioL 


s occupational licensing boards. 




/ 


7:4 NOR TH CA ROLIN 


i REGISTER May 15, 1992 


398 



CUMULA TIVE INDEX 



CUMULA TIVE I.\DEX 

(April 1992 - March 1993) 



199: 



1993 



Pages 



Issue 



1 - 105 1 - April 

106 - 173 2 - Apnl 

174 - 331 3 - May 

332 - 400 4 - May 



A() - Administrative Order 

AG - Attorney General's Opinions 

C - Correction 

FR - Final Rule 

OS - General Statute 

JO - Judicial Orders or Decision 

M - Miscellaneous 

NP - Notice of Petitions 

PR - Proposed Rule 

IR - Tcmporan.' l^ule 



AD.MIMSTRATION 

Auxiliary" Services, 4 PR 

AGRICULTIRE 

Gasoline and Oil Inspection Board, 336 PR 
Structural Pest Control Committee, 332 PR 
Veterinar)- Division, 342 PR 

ENA IRONMENT, HEALTH, AND NATLRAL RESOURCES 

Coastal Management, 211 PR 

Environmental Health, 223 PR 

Environmental Management. 190 PR 

Health: Epidemiolog\\ 140 PR 

Health Ser\iccs. 52 PR 

NPDES Permits Notices, 1. 107 

Radiation Protection, 136 PR 

Wildlife Resources Commission, 28 PR, 133 PR 

\\'ildlifc Resources Commission Proclamation, 176 

FINAL DECISION LET! ERS 

\'oting Rights Act, 106, 174 

HIMAN RESOURCES 

Aans, Division of. 121 PR, 346 PR 
Day Care Rules, 123 PR 
Economic Opportunitv. 5 PR 
FaciUty Services. Ill PR. 177 PR 
Medical Assistance, 4 PR 



399 



:4 NORTH CAROLINA REGISTER May 15, 1992 



CUMULA TIVE INDEX 



Mental Health, Developmental Disabilities and Substance Abuse Services, 111 PR, 297 FR 
Social Services Commission, 183 PR 

INSURANCE 

Consumer Services Division, 125 PR 

Departmental Rules, 7 PR 

Engineering and BuUding Codes, 19 PR 

Fire and Rescue Services Division, 17 PR 

Hearings Division, 124 PR 

Life and Health Division, 22 PR, 347 PR 

Property and Casualty Division, 20 PR 

Seniors' Health Insurance Information Program, 132 PR 

JUSTICE 

Alarm Systems Licensing Board, 27 PR, 189 PR 
General Statutes Commission, 353 PR 
State Bureau of Investigation, 188 PR 

LICENSING BOARDS 

Certified Pubhc Accountant Examiners, Board of, 355 PR 
Cosmetic Art Examiners, 360 PR 
Electrolysis Examiners, Board of 69 PR 
Nursing, Board of, 232 PR 

LIST OF RULES CODIFIED 

List of Rules Codified, 72, 362 

REVENUE 

Motor Fuels Tax Division, 361 FR 

STATE PERSONNEL 

Office of State Personnel, 237 PR 

TRANSPORTATION 

Highways, Division of, 228 PR 

Motor Vehicles, Division of, 68 PR, 142 PR 



7:4 NORTH CAROLINA REGISTER May 15, 1992 400 



( 



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2 




3 




4 




5 




6 




7 




8 




9 




10 




11 




12 




13 




14 




15 




16 




17 




18 




19 




20 




21 




22 




23 




24 




25 




26 




27 




28 




29 




30 




31 




32 




33 




34 




35 




36 




37 




38 






Continued 



Total 
\ Oliinic Title Chapter Subject Subscription* Quantity Price 



39 


15A 


40 


15A 


41 


16 


42 


17 


43 


17 


44 


18 


45 


19A 


46 


20 


47 


21 


48 


21 


49 


21 




22 


50 


23 


51 


24 


52 


25 


53 


26 







New 


Chapter 


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